Archive for August, 2007
I came upon a site on the net recently that featured a calculator that purported to help prospective buyers decide if they should rent or buy. Now there may be some markets where that is a legitimate question, but I say with great humility that my street isn’t one of them. My neighbour bought three years ago Christmas for $375,000 — and just sold it for $808,000.
Don’t wait to buy real estate. Buy real estate and wait.
That said, what are some of the vehicles available to first time buyers to help them break into this daunting market? The Home Buyer’s Plan, for one. The taxman will allow both you and your spouse to withdraw $20,000 tax free from your RRSPs towards a home purchase providing you haven’t owned one in the last five years. The amounts you borrow have to be repaid in equal installments over 15 years, commencing in the second calendar year after the withdrawal, but if you fail to repay the amounts to your RRSP it becomes a taxable liability.
There is a downside other than the drag of having to repay, however: it could impinge on your ability to make full RRSP contributions since you may now have a reduced cash flow.
Bottom line? My inclination would be not to disturb your RRSPs for this or any other purpose unless you absolutely have to. Retirement will come soon enough; meanwhile, the banks are practically giving mortgage money away. Use theirs — even if it is lent to you over 40 years.
August 1st, 2007
That drugstore on wheels, the Tour de France, is mercifully over — for this year, at least. The pharmacological controversy that surrounds it may be new, but the race itself is no stranger to contention. Consider:
– In 1914, in a foreshadowing of Rosy Ruiz‘ taking the subway while running the Boston Marathon, a rider was towed by a car.
– In 1924 two brothers were caught using chloroform and horse ointment to improve their results.
– In 1967 a British cyclist died after taking amphetamines.
– In 1978 a Belgian rider was found to have avoided testing by concealing a rubber bulb under his arm with another person’s urine in it.
– In 1998 an entire team was kicked out for using banned substances
– In 2002 a Lithuanian racer’s wife was arrested after poice discovered a trunk full of performance-boosters. She said it was for her ailing mother.
Swifter, Higher, Stronger indeed.
August 2nd, 2007
In a front page story yesterday, the local newspaper lamented that the average house here in Victoria costs $60,000 more than it did a year ago. Just imagine. It must have something to do with the Law of Supply and Demand or some other arcane economic principle.
That reminds me: earlier this year when the most recent BCAA tax assessments were landing in peoples’ mailboxes, a reader to that same paper posited that real estate fees were adding to the cost of a house purchase. The Times Colonist didn’t publish my response to that astute observation, so I take this opportunity to do so now:
“Well, yes, just as the pharmacist’s wages add to the cost of my pills and the sales clerk’s salary factors into the price of my socks when I buy them at The Bay. Luckily, however, there’s an answer to your reader’s problem: he can sell it himself. As consumers we have choices in an open and free society, and that is quite properly one of them. But short of gnawing on tree bark or learning to knit, does he have a solution for mine?”
August 3rd, 2007
When buying a strata property the issue of insurance is often ovelooked, especially by first-time buyers. First-timers may not have had insurance on their contents in a rental dwelling and, on buying a stratra property, may be under the misapprehension that the strata’s existing insurance is sufficient. That simply isn’t the case.
The strata’s obligatory insurance looks after the structure itself. It does not provide any coverage for the contents of the home, or for any personal liability issues that might arise for which the owner might be held responsible — an overflowing dishwasher, tub, or a leaking water bed, for example.
Strata corporations are now feeling the weight of higher insurance premiums and deductibles on their insurance, and some are now very sensitive to flood and water damage. Individual owners within a strata need to be aware of that, for if their suite can be proven to have been the cause of damage to the building they can be sued by the strata council for the damage caused. Without a policy providing for personal liability, you may well face any legal action on your own.
Insurers tell us that, in some buildings, up to 50 per cent of owners may not carry any personal insurance — a shocking figure. If you are in a strata make sure this coverage is in place. Given the liability, it’s a prudent thing to do.
August 5th, 2007
With interest rates at their lowest in years, it’s perhaps time to at least ask the question: should I be renegotiating my mortgage?
Regnegotiating may not be for everybody. Lenders charge a penalty — sometimes a substantial one — for breaking a contract prior to maturity. The trick is to calculate whether the savings outweigh the penalty. Whatever, it doesn’t hurt to talk to your lender about what your new payments would be.
And you won’t be the first to have asked the question.
Find out the following:
–Your current balance, interest rate, and term
–How much the process is going to cost you
–How the penalty is calculated
–Something of what the competetion is offering
Give it a try. Nothing ventured, nothing gained. The worst that can happen is that you find you’re better to stick with your present terms. Get in touch if you need some suggestions as to who to talk to about it all.
August 9th, 2007
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