The A to Z of Mortgages

A is For Amortization

First Published Date: June 9, 2009

Taking out a mortgage is something that most of us do, sooner or later. There is a lot of fear and uncertainty attached to the idea of taking out a mortgage, not least because the term of a loan taken out to buy a house will generally be longer than if it were taken to buy something a bit smaller. Typically, the term for a mortgage will be in the region of 25 years – a very long time by anyone’s estimation, and a time in which so many things can change. Think about it – the average length of time an individual spends in a job these days has fallen to about three years. Although the average does not apply to everyone, and takes into account that people will spend a very short time in some jobs, it still offers the possibility that you will change jobs more than a couple of times during the term of your loan.

In addition, mortgages are considered to be a little bit nerve-wracking by some because of the jargon which is so often used by those who are selling a mortgage or by the financial experts discussing what the future holds for mortgage owners on the daily news – something of a motif of the age, it has to be said. Maybe most people just about understand what a mortgage is but beyond that, all bets are off. Take the average person (someone without a mortgage, as a preference) and ask them what a “principal” is. Someone who works in a school, or an actor in a lead role? That’s likely to be the response. Even if you mention that you’re talking about money, you’re still more likely to get a confused frown than an accurate reply.

When things get even more complicated, therefore, the average consumer is likely to become still more confused. Ask the average individual, mortgage holder or not, to tell you what “amortization” is, and the eyes will begin to glaze over before you have even mentally added the question mark. This is a pretty important part of a mortgage account, and there are still several people who will be unable to tell you what it is. The reason? No-one has thought to tell them. It could be argued that this kind of thing should be taught in schools, because money smart kids will be less likely to get wrapped up in debt later on.

Amortization is defined as “the allocation of a lump sum amount to different time periods”, and an amortization schedule forms part of any mortgage agreement you may have or take out in future. On a typical amortization schedule, the amount you pay each month towards your mortgage account will be detailed both in terms of how much will go to paying down your principal and how much will pay off the interest on your loan. As time goes on, assuming your loan has positive amortization, you will find that more of your payments are going towards paying off the balance of the loan. The kind of amortization you have will be influential in how efficiently you can pay off your mortgage, so ask any mortgage advisor to take you through your options.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on June 9, 2009.

3 Cheapest Countries to Buy Citizenship

Global Citizenship on Sale

First Published Date: July 8, 2015

Diversification knows no bounds, so why not diversify your passport portfolio as well? Having citizenship from a second or third country can come really handy if you are an investor or entrepreneur trying to take advantage of global opportunity, or even a corrupt 3rd world country official who is trying to escape and enjoy the millions of dollars you stole.

I will go through a few countries today, but there are so many more countries out there offering citizenship and residency that I can’t possibly mention them all. Do your research if you would like to find out more.

1. St. Kitts and Nevis – You will only need to donate $250,000 or buy a $400,000 real estate property to get citizenship in this two-island paradise. The citizenship application is only 3 pages and takes about six to eight months to process. Citizens can travel to 131 countries visa-free.

2. Antigua and Barbuda – Donate $200,000 or buy $400,000 in real estate property. The process takes three to four months. Citizens can travel to 132 countries visa-free, including Canada and UK.

3. Dominica – Invest $100,000 plus fess and receive citizenship. There is no need to even live there. Citizens can travel 87 countries like the UK, Ireland, Switzerland, Hong Kong, Malaysia, Singapore visa-free, but a visa is required for North America or European countries. Dominica is not to be mistaken with Dominican Republic.

If you are looking for European countries, several countries offer citizenship such as Cyprus, Hungary, Malta, etc., but it will cost you several millions dollars.

Now Is Still Not The Time For Major Borrowing

Government credit bad, Consumer credit good?

First Published Date: June 26, 2009

As the danger of a third election in four years hangs over a nation considered by the rest of the world to be so stable it is “boring”, it would be entirely understandable if the alarm bells in the brain of every Canadian started to ring right about now. After all, the prospects of the nation trading at a deficit any time soon are at present not amazingly good. This, however, has not stopped the press from suggesting that now is the time, if ever the time existed, to get out there, dust off your credit card and prepare to hit the shops with a vengeance. This advice comes via the newspapers from the Finance Minister Jim Flaherty.

If it sounds a little bit reckless for something a Finance Minister might say, this is with very good reason. The minister’s words were somewhat more considered, but by the time the press had had their way with them, it did sound a little bit more like incitement to spend the inheritance. What he actually said was “positive signs in financial markets give us cause for cautious optimism that a global recovery may not be far behind”. He added that Canada would lead this recovery and be at the front of the queue to boost business. There is, perhaps, some amount of mockery in the words as set out in the press, with some journalists not quite sharing the Minister’s optimism for the future.

Much of the implication behind the press reaction to what Minister Flaherty has said seems to be that the minister is saying everything he can think of in order to stimulate consumer spending in a time when the nation’s financial sector could do with a helpful push or two. This is not exactly an untried initiative, of course, but the average family may well be heartened by what they hear from the government. The theory of consumer spending stimulating the economy is a self-perpetuating one. Sure, it’ll boost the flow of cash through businesses. It will, however, only operate that way if it is allowed to, and this means that banks need to be as willing to lend as customers are to spend.

The next year to eighteen months will be interesting for those who like to read the global response to financial situations. Many countries in the developed world, including the United Kingdom, are due to hold general elections to decide on the makeup of their next government. Good governmental marshalling of the global economies in the next year and a half will see more incumbent governments re-elected, but to drop the ball now would be to almost guarantee and end to a government’s hold on power. Indeed, with one country’s economy affecting those of its neighbours, it could be that decisions taken in one country affect the election in another. Should you go out and spend, spend, spend in order to keep a few governments in their seats? Well, only if you can afford it. Now is still not the time for major borrowing.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the Canadapersonalfinancewebsite.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on June 16, 2009.

Tools to Find the Most Rewards on Credit Cards in Canada

Compare Travel Rewards Credit Cards

First Published Date: July 12, 2015

There are many tools and calculators out there to make the most out of reward credit cards. Today, I will mention two extraordinary tools you can use to visualize what you are getting from all reward cards side-by-side. It’s easier to comprehend and make an educated decision when you compare side-by-side, instead of reading reviews of each card separately.

1. Canadian Travel Credit Card Comparison by Rewards Canada

This tool can generate several comparison charts from different categories, such as most popular travel rewards credit cards, all travel rewards credit cards, hybrid credit cards, airline credit cards, etc. In each chart, you will be able to see all the credit cards within that category and their info such as annual fee, bonus, earning ratio, redemption value, exchange options, insurance, and much more.

What I like most in the chart is that you can easily view which credit cards are offering certain insurances and which are not. For example, many travel reward cards do not offer trip cancellation insurance. Also, you will find that very few credit cards offer price protection insurance.

2. Compare Travel Rewards Credit Cards by Rate Hub

This is a very different, yet powerful credit card tool you can use to visualize your rewards in dollar amounts. You can plug in your own monthly spending numbers for different categories, such as groceries, travel, and restaurants and it generates dollar amount figures showing how much money you will be making the first year and subsequent years.

This tool gives you a detailed breakdown of how the points are being calculated to get the dollar value and also provide tips of how to redeem your points to get the most dollar value, how not to redeem, insurance benefits, and much more. The insight and knowledge you will have to make the most out of your rewards credit cards using this tool is simply incredible and knowledge means more money when it comes to redeeming your points.

No calculator or tool is 100 percent complete and provide you all the information you need. For example, the Rate Hub calculator provides much information, yet it still fails to consider the recurring annual anniversary bonuses you might get from some credit cards. For example, when you generate numbers for the BMO World Elite MasterCard and the WestJet RBC World Elite MasterCard, it fails to show anniversary bonuses. For example, the BMO World Elite MasterCard provides lounge membership and 4 passes each year that would translate into $200 annually and the WestJet RBC World Elite MasterCard provides an annual round-trip companion fare for $99, and the Rate Hub tool fails to add the dollar value for subsequent years.

Always do through research before deciding on any credit cards and don’t forget to visit the A Dawn Journal Credit Card Section often for more articles like this and keep an eye for my upcoming book Credit Card Hacks: What Credit Card Companies Don’t Want You to Know to obtain invaluable insight on credit cards rewards.

Canada Cottage Country Real Estate – Intro

Cottage Country Canada  Part 1

First Published Date : Dec 24, 2009

Central and Eastern Ontario are wonderful travel destinations for anyone looking to get away from it all. With scenic views and easy lake access, Canada’s cottage country is a very popular tourist destination spot for people from many locations around the world. Each region of Canada has their own local cottage district, with variations in Ottawa and Ontario.

The Ontario cottage district includes the Muskoka, Peterborough, Haliburton Collingwood, and Kawarthas. Cottage country in Canada is very busy on weekends, especially those around the holidays. If you are expecting peace and quiet, then you may want to avoid cottage country during Victoria Day, Civic Holiday, and during the first weekend in September. If you don’t mind a little bustle, however, these long weekends can be very relaxing. There are plenty of recreational areas in the region that provide activities for the whole family.

The lakes are very popular destination spots in Canada. Muskoka is a region that is home to 1,600 lakes, including Lake Couchiching. The Algonquin Provincial Park is also in the Muskoka region, offering tourists a chance to get out and enjoy nature anytime of the year. The park is over 7,000 square kilometres, and is connected by rivers that were once glaciers. There are roughly one million visitors to the park each year, making it one of Canada’s most visited state parks.

Collingwood is located in the Georgian Triangle region and is a town in Simcoe county. Collingwood is a famous tourist spot because of its old time charm and location. It is located in the heart of four-season destination area and known for its vacation cottage resorts.

Haliburton is located in Ontario, as well. This section of Canada is known for its picturesque views and local artisans, as well as being home to Head Lake. This region of Canada is rural, but offers lodgings in the villages of Wilberforce and Eagle Lake, just to name a couple of the tourist destinations in the regions. Eagle Lake also offers a ski resort for family style winter fun.

Kawartha Lakes also lie in Ontario, and offer guests a diverse supply of river and lake access. The region has fifteen main lakes, as well as a host of resorts and lodgings for guests. The Canadian Shield is located in the Kawartha region, where the lakes in the area are wedged between the Shield and the ancient limestone that forms the Golden Horseshoe. The lakes of Kawartha run all of the way to Peterborough, another of Canada’s famous cottage country regions.

Peterborough is also home to a variety of lakes and scenic state parks, with the Kawartha Highlands Provincial Park running through the region. Agriculture is very important in this rural area, which also offers tourists a chance to lodge in lakeside homes while on vacation.

All of Ontario’s cottage country is very laid back and focuses on the outdoors. Warm summer weather brings an influx of tourists to the region, but any long weekend is a good chance to visit the scenic country of Ontario. Each region has unique features, ranging from ancient stone formations to activities on the lakes and rivers of the region. With dozens of lakes to chose from, and lodgings that vary from rustic to luxury, there is something for everyone in Canada’s cottage country.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Dec 24, 2009.