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By Ian Grace

http://www.remonline.com/home/?p=10895

Reverse Mortgages

Anyone who has ever purchased a home is likely pretty knowledgeable about the mortgage process. But how many of us are familiar with the reverse mortgage?

Quite simply, a reverse mortgage is designed for home or condo owners 60 years of age and older who want to be able to access some of the equity in their properties without the demands of making monthly payments on a loan or line of credit.

A reverse mortgage can provide you with up to 40% of your homes appraised value, to be paid out in a lump sum, as needed, or by monthly, quarterly, semi-annual, or annual payments.

This influx of funds can provide the freedom to pay off debts, complete major home renovation projects, travel to dream destinations, purchase investment or recreational property, or supplement your retirement income.

And with that freedom also comes the knowledge that not one cent ever needs to be repaid until the home is sold.

So, what’s the catch?

Well, it depends on how you look at it.

While you maintain full ownership in your property, a reverse mortgage is registered on your title and must be repaid when you sell your home. Interest rates on reverse mortgages are higher than traditional mortgages or lines of credit, and because the interest accrues and is added to the balance, the amount of the mortgage gradually rises. Eventually you will end up with less equity for your estate or to pay expenses. If you look at it from the lender’s point of view, they are waiting for an unspecified period of time for repayment (as opposed to a traditional mortgage with regular monthly payments on the principal and interest) and the trade-off is higher interest rates.

Because property values will likely increase over the years and the loan is guaranteed to never exceed the fair market value of your home, most homeowners who take advantage of the reverse mortgage will usually have money left over once the property is sold and the loan is repaid.

The money obtained from a reverse mortgage is tax-free, won’t affect any type of government benefits you might already be receiving, and if you decide to invest some or all of the proceeds you might be able to deduct the interest against your income at tax time.

Some costs that the homeowner will have to incur in order to obtain a reverse mortgage include a home appraisal (around $200-$400), legal fees, and administration costs.Remember, a reverse mortgage is not for everyone. No one has an unlimited amount of equity built up – a reverse mortgage doesn’t change that fact.

As with any major financial transaction, it is advisable to get qualified independent advice you can trust before signing on the dotted line.

By Jacqueline Sharon

Choosing A Builder

You’ve been carefully considering all the pros and cons, and have decided to build the home of your dreams. Now what? Who do you trust with such a momentous, important part of your life? Not to mention your hard-earned money.

If you take your time and properly research potential builders, it should be a smooth, easy process.

Paul Kehler, President of Homes By Managen recommends, “Ask your friends, family, and co-workers if they have had any experience with home builders. Word of mouth is a great way to compile a list of builders you think might fit your needs. Then meet with at least three of them to see how you feel about the person you’re going to be dealing with. And make sure you ask for references.”

Kehler recommends getting references from people who have just recently taken possession of their new home, as well as from families who have owned their home for about two years, and finally from a past customer with a home that is around five years old. “And ask them if they would be willing to build with that company again,” Kehler says, “If they’re still as happy today as they were when they took possession that will give you a very good idea about the company you’re considering.”

When you’re deciding on a builder, you have a choice between production builders and specialized builders.

Production builders have standardized model homes you can visit, and standard features to choose from which helps to make the decision easier for the homeowner.  They’ve constructed many homes and have generally fine-tuned their floor plans to eliminate most potential issues.

Specialized builders typically operate at a lower volume, and can provide unique and functional plans that have been carefully drawn after detailed consultation with the homeowner. For those who don’t want to settle for the standard designs, this can be a great way to reflect their individual style.

Homes By Managen is a specialized builder with over 25 years of experience in the industry, and usually constructs fewer than 20 homes per year.  Paul Kehler explains that this allows them to spend more time with their clients. “We want to pay attention to the details. Our customers tell us what their needs are, how the home must fit their lifestyles, and we custom-design a residence to suit them. This allows us to be more creative, and come up with new and interesting ideas for our clients.”

Another consideration is the suppliers and sub-trades your builder will be using. Kehler says, “We’ve used that same suppliers and sub-trades for many years. We’ve developed a relationship with them because they’re experienced, knowledgeable, and take pride in their work.”

You will also want ask the builder about any warranties they may offer.  There are many different programs available, so you’ll want to carefully read through the warranty to make sure you’re well-covered.

Another way to protect yourself is to hire a builder who will work through a draw mortgage program with your lending institution. Funds are only advanced to the builder as the construction progresses, and only after inspections are passed.

Once you’ve found the right builder for you, the construction should be an enjoyable and exciting process.

Article by Jacqueline Sharon

Public Service Announcement

IMMEDIATE RELEASE

Don’t pave paradise, create a landscaped lot!

Edmonton, May 17, 2011 – As the May long weekend approaches, many Edmontonians have landscaping in their future. But before you dig into that yard work, remember that there are some rules to keep in mind.

Under Edmonton’s Zoning Bylaw, any front or side yard visible from a public street must be landscaped. While most people landscape with grass, there are many alternatives like washed gravel, shale, shrubs, flower beds, and decorative stones.

“Many people don’t want all the maintenance that comes with traditional grass and flower beds,” said Gail Hickmore, Senior Development Planner with the City of Edmonton. “Using materials like shale and shrubs can give homeowners an attractive but low-maintenance alternative.”

However, it is important to remember that only the driveway leading to the garage and the walkway to the door can be paved with continuous asphalt or concrete. Paving other areas of your yard could result in the City requiring that you remove it and landscape with something else.

“Paving over everything is a definite no-no. Whether it’s to create more parking or get rid of yard work, it really takes away from the look of our city,” Hickmore adds.

Residents should also remember that some projects require permits. A permit is required to build a fence taller than 1.2 metres in the front yard and 1.85 metres in the back yard. Permits may also be required if you are building a deck, shed, gazebo, hot tub or water feature in your yard.

For more information on landscaping bylaws or other permits, visit www.edmonton.ca/LandscapingRegulations or call 311.

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About Edmonton:

This is a city alive with energy and boundless opportunity – a growing economic powerhouse

where business thrives and more than a million lives enjoy the freedom to explore,

experiment, experience, excel and expect the most out of every day. A place like no other,

Edmonton is filled with surprises great and small and a calendar packed with artistic, sporting, theatrical and cultural celebration.

For more information on Edmonton, please visit www.edmonton.ca and www.edmontonstories.ca

Spectacular River Valley

This architecturally custom designed home with over 3800 sqft. is nestled on a huge lot and offers ultimate in luxury living in a private setting. Extraordinary finishings and quality are noted throughout this home from the solid maple doors and cabinets to exquisite heated hardwood, tiles and slate flooring. The Chef’s gourmet kitchen will be enjoyed with the large granite prep. island, many built-in stainless steel appliances and for the Wine Connaisseur an expansive 2500 bottle custom designed wine room. A unique mezzanine landing offers a theatre viewing area overlooking the family room and offers giant screen entertainment. Escape the day in the palacial master suite with stunning views of the river valley, private balcony, incredible custom designed wardrobe room and a luxurious 6 piece ensuite with 2 skylights. A private wing offers 2 large bedrooms with shared ensuite and access to another private balcony. Finished lower level with additional bedroom and oversized triple, heated garage add to the extras in making this home truly one-of-a-kind. 5022 154 Street. To view this property or for more details call Marcel Tessier 780-406-4000

Spring Floodproofing

Spring Floodproofing

By Jacqueline Sharon

Near-record levels of snow this winter have led to an increased chance of spring flooding. Here’s what you need to know to help protect your property and give you added peace of mind.

There are two main places water is likely to leak into your home — your roof and your foundation. So, obviously you’ll want to focus your first efforts on these areas.

Do a visual inspection around the outside of your home, looking for cracks in the walls and foundation. Check the windows and window wells, make sure the eavestroughs are clear and that nothing is blocking the downspouts which should be draining away from the home.

Your roof takes quite a beating every winter, and an accumulation of snow and ice could potentially stop water from draining off properly. Damage caused by pools of water and ice can include leaking water into the home and cracked or broken shingles. The snow continuously melts and refreezes as the temperatures rise which causes ice dams to form. Water seeps under the shingles, expanding and contracting, raising the shingles, and potentially causing a leak. Removing the source of the water is your number one priority. You can safely remove accumulated snow from the roof with a roof rake. Remove the snow from the front four to six feet of the roof. If ice dams are already present, you’ll need to remove a few feet of snow from behind the ice dam. Do not yank or pull at the ice, trying to remove it. You’ll end up breaking your roof rake or pulling out some shingles and making your problem much worse. Once the snow has been removed and can no longer feed the ice dam it will diminish in size.

As an additional safety measure, you can check the catch basins on the street near your home to make sure they are clear of debris.

If your home has experienced basement leakage in the past, you may want to look at changing your landscaping and grading the property so water can flow away from your home in all directions. If you have a sump pump, double-check to make sure it is working properly. If you don’t have one, you might want to consider having one installed. A sump pump usually sits in or above a small hole in the basement floor (the sump pit) which is designed to catch any water that may get inside. As the water level in the sump pit rises, the pump switches on and begins pumping the water out through various pipes. While sump pumps are usually wired into the home’s electrical system, it is essential to have some sort of back-up power. Sump pumps are needed the most during storms, which is also a common time for the electricity to go out.

You may also elect to have a water alarm installed with your home security system, which will alert you in case water starts to accumulate.

If you live in a flood-prone area, you might want to take some extra precautions to protect your important papers and financial information.

Make copies of your most important documents and store the originals in a secure place outside your home such as a bank safety deposit box. Photograph your most valuable possessions and keep the photos with your valuable paperwork. Keeping receipts from big purchases like appliances and electronics is a good idea so you have some sort of proof of the original cost should you ever need to make an insurance claim. Double-check your insurance policy to find out what level of flood insurance you have, and upgrade if necessary.

If the forecast indicates you are at a severe risk of flooding, you’ll want to prepare your basement by anchoring any fuel tanks, raising your furnace, hot water tank, and laundry appliances on cement blocks, and moving furniture and valuables to a safe place.

The City of Edmonton’s Drainage Services Department has an abundance of additional information on their website.  Visit http://www.edmonton.ca/city_government/city_organization/drainage-services.aspx for more information or call  780-496-5454.

Bright, Beautiful Acreage

Click on picture to view tour

21423 25 Avenue SW – Across from Petroleum Golf Course Over 2763 sqft – An acre lot within city limits Custom 2 storey, 4 bed, 5 bath with finished basement Gorgeous landscaping with water feature, fully fenced yard Triple insulated and heated garage. To view this property or for more details call Jill Jordan 780-777-3434

Property Presented by The Brent MacIntosh Real Estate Group

Click picture for tour

Dream home! This home will impress you from the moment you walk in. It features over 5000 square feet of developed space plus another 1000 above the garage, 4 bedrooms, 5 bathrooms, hardwood, granite, island kitchen with built in appliances and breakfast bar, main floor den, main floor laundry, formal dining room, soaring 22′ vaulted ceilings in living room, 2 fireplaces (1 wood & 1 gas), non maintenance wrap around decks and a heated triple attached garage. The main floor master bedroom has access to the front veranda, his & hers closets and a luxurious 5 piece ensuite. Upstairs there is a computer loft overlooking the living room plus 2 kid’s bedrooms each with its own 3 piece ensuite. The fully finished walkout basement has a huge recreation room, roughed in theatre room, exercise room, bedroom #4 and bathroom #5. Some harder to spot extras include geo thermal heating & cooling, heat recovery system, in floor heating & pre-wiring for entertainment system throughout the home. For more information or to view this home call The Brent MacIntosh Real Estate Group at 780-464-0075.

LIFE LETTER

Credit card tips and tricks

Statistics Canada recently announced that the Canadian debt-to-income ratio hit a record 148.1%. This means that for every $10,000 of earnings, we average $14,810 of debt.

Yes, that also means that many actually carry far, far more than that.

With interest rates at record lows and the very easy availability of credit, it can be easy to slip into the bottomless pit of consumer debt. At most professional sports venues, we get offered a “free” item, like a shirt, blanket or toque, simply for applying for another credit card, usually with our favorite team’s logo on it. But what can we do? Consider the following credit card tactics:

Avoid the minimum payment – Credit card issuers are now required to disclose more to their cardholders regarding time to pay. For example, Greg received his statement for $5,075.23 of purchases. The statement clearly indicates that the interest rate charged if he doesn’t pay the full amount by the due date will be 19.99%. It also states, “If you make only the Minimum Payment each month, we estimate it will take 42 years and 4 months to fully repay the outstanding balance.”

Choose a card with benefits for you - To encourage us to use the credits cards offered to us, lenders offer a number of incentives. If you are going to use a credit card, there might as well be something in it for you. Choose a card that gives you “points” or “cash- back,” or one with a fixed, low interest rate. Use the latter if you are carrying a balance from month to month and don’t have better borrowing options.

Avoid carrying a balance - It can be so easy to fall into the trap of keeping up with the neighbors – buying things we don’t really need with money we don’t really have to impress people we don’t really like. It is very important to know that if you do not pay the full balance by the due date, any new purchases on the card start getting charged interest (remember the 19.99%?) from the date of purchase.

Avoid cards with annual fees - Some credit cards come with a yearly charge just for the privilege of using it. The issuer charges each merchant a small percentage of every credit card purchase, so there really isn’t a need to charge this annual fee. However, some credit cards that offer certain bonus points may still be a good value if the volume of purchases and points earned far outweigh the yearly extra charge. For example, Leanne runs a small business and charges all her business expenses on a credit card that earns her travel points. She pays the balance every month, on time, and earns enough points to cover the cost of her family winter getaway every year.

Time larger purchases - This means being aware of each credit card’s closing date. Let’s say you are going to buy some new furniture. The statement period for the credit card you will use (and earn points with) ends on the 7th of the month, but payment isn’t due until the 29th. Making the purchase on or shortly after the 8th of the month will actually give you free use of the lender’s money for up to 51 days, as long as you pay the full balance on the due date. Consider arranging a future payment for the day before the due date as soon as you get your bill.

Want help reaching your financial goals? Call today!

Cyril H. Fried

Cyril Fried Financial Services Inc. Suite 104, 17704-103 Ave., Edmonton, AB T5S 1J9

780 481-8950 cyril.fried@sunlife.com

Copyright © 2011 Life Letter. All rights reserved. (2011-01)