Time is Right For Spanish Real Estate

Property in Spain

First Published Date: Oct 1, 2010

Due to financial troubles in the country, property prices in Spain have fallen to their lowest levels in recent memory. Many North Americans and Europeans are now looking at possibly getting a second home in Spain to take advantage of the nice weather, beautiful landscape and friendly people. Unlike buying property in third-world countries and developing nations, when you buy in Spain you are moving to a country that is a world leader. So, if you are going to buy property in Spain, what do you need to know as a foreigner?

Spain does not have limitations like other countries in foreigners buying homes, so it is actually quote easy to buy a home there. The first thing you need to think of is where you want to live in Spain. Spain has a huge amount of space, and there are many different regions. Do you want to live near the beach, or do you want to live near the mountains? Do you want to live in a city, or a small rural village? Find out where you want to live, before you start looking for property to buy.

When you know where you want to live, contact an independent legal advisor in that region. They will have a clear understanding of the legal system of Spain and they will know the language better than you in most cases. Make sure your advisor is working for you and not tied to any property dealer who you are going through because that could be a conflict of interest that just costs you more money.

Even though prices of homes in Spain are very low, that does not mean you shouldn’t look at what you can afford. Having enough equity to buy a home will help you a lot, but if you need to get a mortgage, most Spanish banks will offer you a mortgage of 60 to 80 percent of the home price. That means you have to come up with 20 to 40 percent of the home price as a down payment. That can be a lot of money for higher end homes but luckily with record low prices, your down payment will be low as well. The more you have, the more you can get and the less of a mortgage you will be saddled with. Just like you would anywhere else, do your research and shop around with Spanish banks for the best rate. You want to pay as little as possible in interest.

Lastly, you need to have proof of income with your last three pay-slips, six months of bank statements, and a credit report will help when getting a mortgage. Your debt load cannot exceed 35 percent of your total monthly income if you are going to get a Spanish mortgage. It is important to not that that debt load includes your possible Spanish mortgage.

Spain is a beautiful country, so why not take advantage of the low prices now and move there where you can enjoy the scenery, friendly people and amazing food and culture.

This Credit Card Payment Trick Saves You Money

Credit Card Interest Tip

First Published Date: February 28, 2016
all know it’s in our best interest to pay off credit card balances each month so you don’t get hit by the high interest credit card companies charge you. However, it may not possible for some of us to pay off balances in full. Today, I will like to show you a simple trick that that will save you money if you carry balances.

Credit card companies mainly use two methods to calculate interest. These are average daily balance method and daily balance method. As it sounds, average daily balance is the average of your daily balance for the full billing period. This average is multiplied by the daily interest rate and then multiplied again by the number of days in the billing period.

The daily balance method is much simpler than the average daily balance method, although both methods generate same the interest charge. The daily balance method looks at your interest charge daily for the billing period and adds each day’s interest to get your interest for the month.

So if you look at these methods carefully, you will realize that by paying several times (instead of paying once) on your bill every month when you carry balances, you will save money on interest charges, as paying several times will bring down your daily balances and averages several times for the billing period. Any partial payment will have the effect of lowering the interest you pay.

For example, if you are paying $200 towards your balances once a month, paying $50 in 4 weeks or several times throughout the month will generate less interest. On small balances, this trick may not trigger significant savings, but the savings will be noticeable on higher balances.

Keep in mind that if you are paying balances in full, you don’t need this trick, as you are not paying interest anyways. If you would like to find out more on how your credit card charges interest, read here.

Foreign Investors' Black Money Is Canadian Real Estate's Real Problem

Canada Implements New Mortgage Rules

First Published Date: February 29, 2016

The days of buying expensive homes with only 5 percent down payments are gone in Canada. Starting Monday, Feb 20, 2016, new mortgage rules kicked in that require 10 percent down payments to buy homes on the portion costing more than $500,000. What this means is that there is still a 5 percent down payment required up to $500,000 and anything above $500,000 will require 10 percent.

To tame the skyrocketing real estate market in Canada, measures are being taken to make it harder for buyers to buy expensive homes with little down payments. For homes costing below $500,000, the requirement is still the same (the aforementioned 5 percent down payment) and there are no rule changes for homes costing more than 1 million dollars; they require a 20 percent down payment.

My Take

I doubt this will have much of an effect on soaring real estate prices. Canada has become a safe heaven for foreign investors with illegally-earned money. In the 3rd world countries from where these monies are flowing through, millions of dollars are not a problem as they are mostly earned from bribes and not honestly earned like hard-working Canadians earn their salaries.

I have heard stories from buyers from countries like China, Russia, and Bangladesh, where their salaries cannot be more than $25,000 a year, are buying 6 to 7 condos or houses in palaces like Toronto and Vancouver and paying more than a million dollars in cash apiece.

Canada has no procedure in place to verify incomes for foreign buyers and such buyers also don’t pay income taxes on their Canadian real estate properties. So these people are making their black money white in Canada, as once they sell their real estate property in Canada (that was bought with black money), it becomes a legitimate transaction and the money becomes white.

Canada Pension Plan or CPP

Understanding Canada Pension Plan or CPP

First Published Date: July 2, 2010

One of the most important things in your retirement, if you live in Canada, is your Canada Pension Plan. This is what will provide you with much needed money to go with your savings after you have retired, but there are some important things to know about it. Many assume that the payments just happen, regardless of when they take their retirement, but there is much more to the Canada Pension Plan than that.

First of all, your Canada Pension Plan is a monthly benefit that is paid to you, when you have contributed to it through your working life. It is designed to provide you with one-quarter of the earnings you have received, to a maximum amount and as of 2010 that amount is $934.17.

In order to qualify for the Canada Pension Plan, you need to have made at least one valid payment through work, usually based on at least one year’s of work. You also need to be at least 65 years old, unless you meet the earnings and contributions requirements and then you can start receiving it between the ages of 60 and 64. If you decide to take your pension between the age of 60 and 64, then your pension payment will be reduced by .5 percent for each month before you turn 65. The maximum your payment can be reduced is 30 percent though.

One thing many people do not realize is that the pension plan does not kick in automatically at the age of 65; you need to apply for it. That being said, if you are receiving a CPP disability benefit, then that will automatically change over to the Canada Pension Plan payments when you turn 65.

If you do not start your pension plan until you are past the age of 65, you actually increase how much you get and many people do not realize that is the case. If you are between the age of 66 and 70 and you start your payments, you will get .5 percent more each month after the age of 65, and before the age of 70, to a maximum amount of 30 percent. If you start your pension after the age of 70, you receive the same pension amount you would have at the age of 70.

Sometimes people change their minds after they start the pension and decide to cancel it. Under the law, you are allowed to do this up to six months after the pension starts. You need to request a cancellation in writing and, most importantly, you have to pay back all the benefits you received to that point. In addition, you must pay any CPP contributions that you would have during that period of time you collected a pension.

These are just some of the important things to know when you are dealing with a Canada Pension Plan. Knowing these can ensure you get the most out of your pension when you do decide to take it.

Don't Book That Trip With Your Travel Rewards Credit Card Yet

Trip Cancellation Insurance Is Important

First Published Date: March 6, 2016

Before booking your next trip, make sure your travel rewards credit cards offer a very important insurance called Trip Cancellation Insurance. Many rewards travel credit cards do not offer this important insurance, although you will find mega sites like MoneySense or Rewards Canada are recommending these cards as the best travel credit cards and misleading consumers.

Trip Cancellation Insurance reimburses you in case a trip has to be cancelled due to covered causes like illness, death, and much more. You should not go on a trip without this insurance, as it will be a lifesaver in case you have to cancel your trip.

However, if you follow MoneySense or Rewards Canada blindly and book your trip with their number one recommended travel cards WestJet RBC World Elite MasterCard (MoneySense 2015) and American Express Gold (Rewards Canada 2016) and you need to cancel your trip due to illness, you will get burned heavily before your sun-filled trip to the Caribbean even begins because these “number one” cards do not come with trip cancellation insurance.

The methods these sites are using to rank the best travel credit cards are questionable and they do not have the consumer’s best interest at heart, as they are withholding vital pieces of information that you need to know before picking the best travel credit cards for you. For example, you will not find mentioned anywhere that those best travel credit cards are missing trip cancellation insurance. I wrote more about this in these articles:

Before picking any rewards credit cards, always do your research and look for independent web sites such as A Dawn Journal that are not affiliated with or compensated by credit card companies.