Not all insurance products are created equal. One of the most common mistakes homeowners and potential homeowners make is that they hear the word “insurance” and just assume they have it! Well, you might have one kind of insurance, but you might be missing coverage elsewhere. It is important to understand all the different insurance products to ensure you have proper coverage.

To help you get a better understanding of the insurance, below are the four main insurance product options you will encounter and what they mean:

Default Insurance: This insurance is mandatory for homes where the buyer puts less than 20% down. In fact, default insurance is the reason that lenders accept lower down payments, such as 5% minimum, and actually helps these buyers access comparable interest rates typically offered with larger down payments.

Default insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments.

In Canada, most homeowners know of the Canada Mortgage and Housing Corporation (CMHC), which is run by the federal government, and have used them in the past. But did you know? We also have two private companies, Sagen Financial and Canada Guaranty, who can also provide this insurance.

Home (Property & Fire) Insurance: Next, we have another mandatory insurance option, property and fire coverage (or, home insurance, as most people know it by). This is number two on our list as it MUST be in place before you close the mortgage! It is especially important to note that not all homes or properties are insurable, so you will want to review this sooner rather than later.

In addition to protecting against fire damage, home insurance can also cover the contents of your home (depending on your policy). This is important for anyone looking at purchasing condos or townhouses as the strata insurance typically protects the building itself and common areas, as well as your suit “as is”, but it will not account for your personal belongings or any upgrades you made. Be sure to cross-check your strata insurance policy and take out an individual one on your unit to cover the difference.

One final thing to consider is that you may not be covered in the event of a flood or earthquake. You may need to purchase additional coverage to be protected from a natural disaster, depending on your location.

Title Insurance: Another insurance policy that potential homeowners may encounter is known as “title insurance”. When it comes to lenders, this insurance is mandatory with every single lender in Canada requiring you to purchase title insurance on their behalf.

In addition, you have the option of purchasing this for yourself as a homeowner. The benefit of title insurance is that it can protect you from existing liens on the property’s title, but the most common benefit is protection against title fraud. Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge.

Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property.

Mortgage Protection Plan: Lastly, we have our mortgage protection plan coverage. This is optional coverage, but one that any agent can tell you is extremely important. The purpose of the mortgage protection plan is to protect you, and your family, should something happen. It acts as a disability and a life insurance policy in regards to your mortgage.

Typically, when you get approval for a mortgage, it is based on family income. If one of the partners in the mortgage is no longer able to contribute due to disability or death, a mortgage protection plan gives you protection for your mortgage payments.

If you have any questions about mortgage insurance or what are the best options for you, please do not hesitate to reach out to a Dominion Lending Centres mortgage expert for professional advice! They can take a look at your existing plan and discuss your needs to help you find the perfect coverage to suit you and your family.

Published by DLC Marketing Team

Today, the Bank of Canada increased its overnight benchmark interest rate 75 basis point to 3.25% from 2.50% in July. This is the fifth time this year that the Bank has tightened money supply to combat inflation. While the latest increase was comparatively smaller than the move made in July (100 basis points), it is bigger than the changes made in March (+0.25%), April (+0.50%) and June (+0.50%).

Moreover, the Bank stated it is not finished hiking its policy interest rate just yet and noted that central banks around the world also “continue to tighten monetary policy.”

These are the highlights of today’s announcement.

Inflation at home and abroad 

•  In Canada, CPI inflation eased in July to 7.6% from 8.1% because of a drop in gasoline prices;  however, inflation (excluding gasoline) increased and data indicate a “further broadening of price pressures,” particularly in services
• The Bank’s core measures of inflation continued to move up, ranging from 5% to 5.5% in July
• Surveys suggest that short-term inflation expectations remain high domestically and “the longer this continues, the greater the risk that elevated inflation becomes entrenched”
• Global inflation remains high and measures of core inflation are moving up in most countries

Economic performance at home and abroad

• The Canadian economy continues to operate with excess demand and domestic labour markets remain “tight”
• Canada’s GDP grew by 3.3% in the second quarter – somewhat weaker than the Bank had projected – but indicators of domestic demand were very strong
• Canadian consumption grew by approximately 9.5% and domestic business investment was up by almost 12%
• Commodity prices have been volatile: oil, wheat and lumber prices have moderated while natural gas prices have risen
• Economic activity in the United States has moderated, although the U.S. labour market also remains tight
• China is facing ongoing challenges from COVID shutdowns

Canadian housing market

• With higher mortgage rates, the housing market is pulling back “as anticipated” following “unsustainable growth during the pandemic”

Looking ahead

The Bank expects the Canadian economy to “moderate” in the last half of 2022 as global demand weakens and tighter monetary policy begins to bring demand more in line with supply.

However, given the outlook for inflation, the Bank’s Governing Council continues to note that its policy interest rate will “need to rise further.”

To underscore its current thinking, the Bank wrote that it remains “resolute” in its commitment to price stability and will continue to take action as required to achieve a 2% inflation target.

On the bright side, the Bank offered that as the effects of tighter monetary policy work through the economy, it “will be assessing how much higher interest rates need to go to return inflation to target.”

October 26, 2022 is the BoC’s next policy announcement date at which time it will also make its fourth Monetary Policy Report of the year available for review.

Published by First National Financial LP

If you lost your job tomorrow, would there be a list in your head right away of things you could do to hang on or would you just be at a complete loss?

Financial knowledge will allow you to better assess your options and create a plan without getting overwhelmed. However, even with the best laid plans and all the financial literacy in the world, it’s impossible to completely eliminate financial stress — so how do you cope?

1. Have a clear picture of your financial situation.
Do you know your average monthly spend? Do you know how much you owe, the interest rate on your debts, and how much you pay each month in interest charges? Have you ever tracked and categorized your expenses to identify areas (car? dining out? home improvement?) where you could cut back if required?

Avoiding these questions is understandable because the answers may lead to some hard lifestyle choices but turning a blind eye to your real situation will only lead to never-ending financial stress. You need to clarify your situation, collect and analyze your data, and then start creating a plan of attack.

2. Accept your mistakes.
Move on from any emotional reaction and learn to live with any poor financial decisions from your past. Regret and anger won’t make that beach vacation you took on your credit card disappear! That beach vacation is long gone, just focus on your plan to channel more money towards paying for it!

If you need to pass on a night out with the gang because you want to put that $75 towards your card, then just come out and tell them. More than 50% of Canadians live paycheque-to-paycheque, so you won’t be surprising anybody!

3. Set small, achievable financials goals to bolster confidence and measure progress.
If you have credit card debt, try adding $100 to your monthly minimum credit card payment. If you have no credit card debt, open a TFSA and contribute a $100 a month. A hundred bucks might seem like a modest amount, but it is a realistic goal that will get you started and will help a lot more than you think.

Did you know that a $100 monthly deposit into your TFSA ($1200 year) from age 18 to 65 with will grow to almost $400K based on historical stock market returns?

Adding $100 monthly to the minimum 3% payment on a $5K credit card debt will cut the time required to pay off the balance from 251 months down to 38 months and save you $4500 in interest charges!

4. Get inspired and stay motivated.
Follow a personal finance YouTuber or blogger that you really connect with, hang a goal chart or progress tracker on the wall, talk with a friend or relative who has the same issues and work together — there are lots of methods and resources available to help you, even with a limited budget.  It’s critical to maintain a positive attitude and don’t beat yourself up — there are plenty of others in the same boat!

The ultimate goal is to completely eliminate financial stress by building passive income, so you don’t have to go to work everyday to pay the bills. Achieving this goal will take time and there is bound to be some stress along the way. Learn to cope and stay focused on your goals.

The worst financial mistake you can make is believing that a Registered Retirement Savings Plan (RRSP) or Tax-Free Savings Account (TFSA) is something to look into when you are a little older and more able to set some money aside. The fact is, you don’t use these accounts for saving at all, you use them for investing. Your retirement fund could grow to seven figures, even if you only contribute a fraction of the allowable yearly maximums. They also come with huge tax-saving benefits.

A lot of people get discouraged by the sheer amount that you are allowed to contribute to these registered accounts and the mere pittance they may be able to come up with — don’t fall into that mindset!

If you make 60,000/year from your job, you could contribute over $10,000 to your RRSP and another $6000 to your TFSA every year. Considering you are only going to have about $45K in your jeans after taxes, finding a spare $16K would require more than 30% of your take-home pay!

The good news is that your yearly contribution limits can be carried over and as you grow older (and theoretically have more disposable income) you can catch up. The bad news is that playing catch up isn’t going to happen unless you are very disciplined with your spending. Sure, you may earn more, but you will spend more… kids, cars, vacations, even the cat is going to cost you $800/year!

That extra disposable income you were envisioning may not materialize until you are in your mid 50’s, if ever! You need to scrape together whatever investment savings you can now, even saving just 5% ($200/month) of a $60K salary would make a huge impact.

Putting off getting started is going to cost you way more than you ever imagined in lost investment returns. Ignore the pitiful interest rates you see on bank savings accounts, holding cash will actually cost you money at current interest and inflation rates. However, the average annual return on many stock indexes (S&P, TSX, DSJ) over the past 40 years is around 7%. If you do a little math, you are soon going to realize that even on a relatively small investment of $200 month, the difference between starting when you are 18 versus starting at age 28 is jaw dropping.

Investing $200/month from age 18 to 65 at 7% would give you $790,139. The same $200 at the same rate from age 28 to 65 would yield just $384,810. Sure, you would be contributing $24,000 more over that extra 10 years, but your nest egg at 65 would be double — more than enough to keep you poolside at a nice resort every winter while those late starters are stuck in the snow!

There are plenty of rules, regulations and strategies to consider and every angle of the TFSA vs RRSP debate has been extensively written about. While you do need to understand the basics of how they work, the simple goal for the vast majority of us should be to put something, anything, into one (or both) of these accounts on a regular basis and start investing — you can’t go wrong!

Published by DLC Marketing Team

Published by First National Financial LP

It’s an excellent time to be alive if you’re an early adopter of technology; it’s slightly less excellent if you’re a well-meaning-but-late-anyway adopter (like myself). The breakneck pace of technological innovation can easily leave you behind the curve, with new startups, apps, and devices appearing on an almost daily basis. Trying to catch up to the pack can be daunting and expensive even if you’re willing to get with the times. On the other hand, if you’re not interested in having the newest, shiniest toys, you’re likely wondering—what’s the point anyway?

The good news is: you’re not at a disadvantage if you’re late to the tech-savvy party. There are quick, reasonably-priced steps you can take to bring your home a step closer to the future. Here are four upgrades you can acquire right away, in order of practicality and ease of integration.

USB wall outlets

Oh yes, we’re starting off with real cutting-edge stuff here: clearly, combination power outlets are the most electrifying innovation to hit the market in recent years! I know this is a pretty tame entry point, but I’d argue the practicality makes up for the lack of sizzle. If you’ve owned an electronic device in the past twenty years, you likely have firsthand knowledge of the annoyances that come with charging the things. Not only do you need to have the right cable, you also need an appropriate adaptor, and all that comes before finding a free (and conveniently located) power outlet to plug into.

The USB (Universal Serial Bus) standard for connections, communication, and power supplies has been around and in use worldwide since 1996. Some companies do their own thing with proprietary cables just because they can, but there are almost no brands that bypass the USB connector altogether. Given their ubiquity, it was only a matter of time before they appeared on power outlets themselves. In one neat package, wall outlets with USB charging ports have solved the adaptor and free socket issue. You still need a compatible cable, but those are a lot easier to come by and less annoying to cart around. Plus, dedicated USB ports mean you aren’t required to unplug other devices, which is a big plus when you have multiple users who all need a charge.

These combo outlets go for as low as $30 per piece, and are fairly easy to install even with no experience!

Smart appliances

There’s a good chance that either you or someone you live with talks to their phone/watch/tv/magic speaker box thing already. A large majority of the technologically-inclined have embraced Alexa, Google, Siri, or Cortana, and are happily integrating them into their homes. Basic smart home setups are getting more affordable by the minute, and you likely own at least three of the foundational pieces already (smartphone, digital assistant, smart TV).

Which brings us to upgrade option number two: “smart” appliances. If you’re already on your way to having a connected home, why not consider upgrading to appliances with smart home functionality? At best, you can enjoy a greater degree of convenience and control; at worst, you’ll have a feature that you can safely ignore if you so choose. The fact is, smart functionality will likely become standard issue sooner or later. Even big-ticket appliances like fridges, dishwashers, washing machines have begun to include wifi-connectivity and apps that let you monitor and control how they operate remotely.

Digital assistants are here to stay, so why go out of your way to avoid them? While compatibility isn’t generally an issue, certain appliances work best when paired with specific assistants, so we recommend getting ahead of the problem and planning for the ecosystem you might like to have.

Obviously, we’re not saying you should toss out all your stuff right this second just to get with the times. Rather: whenever you reach a natural point for upgrading in the home renovation or sales process, give some careful thought to acquiring a smart appliance.

Smart locks

Smart locks, like the smart appliances mentioned above, are also part of the Internet of Things, but they get their own category because of how useful they are.

There are two kinds of people in the world: those who have lost their keys at least once, and liars. We’re all familiar with timeless questions like “Where on earth are my keys?” and “Uh oh, did I lock the door?”. Traditionally, this meant upending your house until you find them in your pocket or suffering in mild annoyance till you get back home. However, the modern answer is: who cares? You have a smart lock!

What exactly is a smart lock? It’s an evolution of the traditional mechanical lock, using electronics to allow for keyless entry. Smart locks are easy to install, and either replace or upgrade the existing locking devices on your doors. Once that’s done, you can wirelessly unlock your door with a smartphone, combination code or key fob.

To be clear: while there are some security benefits to using smart locks (such as logs that list every time your door was opened, etc.), they’re not necessarily more secure than a standard lock. Really, you’d be upgrading for the convenience they provide, and an improvement to your quality of life. Features like remotely locking or unlocking your door, temporary access codes for guests and digital assistant integration all make the switch worthwhile. Moreover, almost all smart locks can still be unlocked with a traditional key as a failsafe (in case of power outages or depleted batteries).

It’s a small change for your home and the closest thing we have to futuristic Star Trek doors that swoosh open. It’s hard to find a downside here!

Electric vehicle chargers

For those of you trying to be more eco-friendly, there’s a simple argument to be made for installing electric vehicle chargers in your home: pretty soon, you’re going to need one. While Tesla may have shot the idea of electric cars into the mainstream, plenty of car manufacturers read the writing on the wall and developed their own electric cars. It’s no longer a question of if electric will replace internal combustion engines, but when. Fossil fuels are a finite supply, and a new wave of ecological awareness will likely move the world away from dependence on them. The future of automotive technology is electric, and it’s easier than ever to join the revolution.

Electric vehicles (EVs) rely on high-powered chargers to refuel and are consequently most common among people living in or very close to major cities. Drivers have to plan around access to chargers when they’re away from home, although we’re trending towards increasing EV charger infrastructure. However, until these charging stations become as common as (or replace) conventional gas stations, folks will still rely heavily on their own homes to get a full charge for day-to-day use.

So how does this fit it into the home upgrade conversation? Admittedly this is the most speculative of our recommendations, but here’s the gist of it: if we assume either you or the people you know are soon going to be driving electric vehicles, it makes sense to start planning for the means to support them. Powerful EV chargers for the home aren’t exorbitantly expensive at the moment, are reasonably straightforward to install, and will serve as a source of convenience or potential income.

Charger systems are currently available in plug-and-play or integrated models, which differ in terms of price, portability, and power. Plug-and-play chargers are less expensive, very easy to install (you literally just plug them in), and can move with you if you change homes. Integrated chargers offer faster and more powerful charging, but are fixed once installed and come with a higher price tag. In either case, many provinces offer hundreds of dollars in incentives to folks purchasing EV chargers, which makes the price range a lot more palatable!

Bottom line

Fortunately for those of us frantically running behind the curve, we’re still a good number of years away from having truly crazy things like robot assistants/housekeepers that will need their own docking cradles or flying cars. Our recommendations above aren’t from the bleeding edge of tech development, but they don’t need to be. They’re practical, accessible upgrades that could improve your life with minimal intrusiveness. Though we’re looking ahead to the future, there’s no time like the present for the technologically-tardy!

Published by DLC Marketing Team & FCT

To maximize your enjoyment, we have some great tips for staying cool this summer AND saving money while you do:

1. Cook in the Great Outdoors

Summer is all about enjoying the sunshine, spending time with your friends and family, and relaxing in your own personal backyard oasis. We suggest the grill masters take their place for a few months of BBQ-fuelled meals. By avoiding cooking in the house, not only do you reduce the heat from the kitchen, you are also naturally relaxing in your extended outdoor living space.

2. Take Advantage of Fans

Instead of cranking the A/C (and your electricity bill), consider cooling down with portable fans. Not only are these great options if your home is not equipped with air conditioning, but they can help ease the stress on your unit when used together! Portable fans work by creating a breeze, helping to circulate the air and causing a wind-chill effect that hits your skin and helps keep you cool.

PRO TIP: For an extra blast of coolness, place a bowl of ice in front of the fan to create a refreshing mist of air!

3. Shut Out the Heat

We wait for summer all year but, as nice as it is to have that bright light streaming though, it can also increase the heat in your house and cause extra stress on your A/C unit and fans. On especially hot days, keeping the curtains drawn can help reduce the heat input and allow your home to stay cooler and more comfortable!

4. Maintain Your Air Filters

An often-overlooked aspect of home maintenance are air filters. With summer in full swing, we suggest you check the filters in your home. Dirty or jammed up filters slow airflow and make the system work harder, thereby reducing airflow and causing the heat to build up in your home. Plus, ignoring the maintenance on these can lead to expensive repairs down the road. Replacing your air filters every three months is ideal to keep dirt and dust out of your system and ensure they are working optimally.

5. Swap to Energy Efficient Lighting

You have probably heard some of the reasons why LED lights have become so popular, but did you know that they also produce 75 percent less heat than incandescent bulbs, and can help keep room temperature down? This cannot only help keep your home cooler during those toasty summer months, but it can also help reduce monthly bills!

Whether you implement one or all of these handy cool-down tips, we hope you have an amazing summer season filled with backyard memories and enjoy your home to the fullest!

Published by DLC Marketing Team