(NC)-If you are shopping for a house, you may have heard of some new mortgage products on the market, with amortization periods of up to 30, 35 and 40 years. While they can mean an attractive smaller monthly payment, you should be aware of the potential consequences - such as the amount of interest you would have to pay, over the years.
Do the math and know your options before signing a mortgage contract
The Financial Consumer Agency of Canada (FCAC) recently released an update to its suite of on-line mortgage tools. FCAC's mortgage qualifier calculator and mortgage payment calculator are designed to help consumers determine, first, if they qualify for a mortgage - given their current income level and debt load
- and then how to calculate their optimum schedule of payments. FCAC's mortgage calculator can show you how many years and how much money you can save by making pre-payments on your mortgage.
These tools, together with the Agency's FCAC's on-line mortgage quiz and its publication The ABC's of Mortgages, can help you better understand your rights and responsibilities as a consumer, as well as the terms and conditions associated with the different mortgage products that are available.
Despite knowing the extra costs involved, you may still have a good reason to opt for a 30- or 40-year mortgage product. A longer amortization period may be the only way you can afford a house in today's expensive housing market. However, if you are thinking about a long-term mortgage, you should consider making accelerated bi-weekly payments. By doing so, you can save tens or even hundreds of thousands of dollars in interest over the years.
You can find more information on mortgages by consulting FCAC's Frequently Asked Questions (FAQ) database, which contains answers to a number of mortgage-related questions - from penalty calculations, to insurance products, to interest rates. To view the Frequently Asked Questions, visit the Agency's Web site at: www.fcac.gc.ca and go to the "For Consumers" section.
To obtain a free copy of The ABC's of Mortgages, call FCAC, toll-free, at:
1-866-461-3222 or visit their website at www.fcac.gc.ca.
FCAC is a federal government agency that protects consumers' rights and provides them with information about the financial products and services.
- News Canada
Pre-paid Cards: Balancing The Benefits With The Costs
(NC)-A new kind of payment card is now available in Canada. It's called a "pre-paid" card. You can get this type of card in several places such as cheque-cashing outlets, retail stores, financial institutions and on the Internet. Although pre-paid cards look just like credit cards and can be used in a similar way, they are not credit cards.
In contrast with regular credit cards, with a pre-paid card the money you spend is your money - which you "load" onto the card, before using it. These cards offer the same type of convenience as a credit card, but this convenience comes at a price. The fee structure of a pre-paid card is quite different than that of a credit card. You often have to pay different types of fees to take advantage of the benefits they offer.
PRE-PAID CARD BASICS
The Financial Consumer Agency of Canada (FCAC) recently released a booklet for consumers, called Pre-paid Cards, which outlines the different types of pre-paid cards that Visa and MasterCard offer, and explains what they are, how they work and the various types of fees consumers must pay to use them.
Since there are different types of pre-paid cards on the market, before choosing a card it is best to shop around. FCAC's Pre-paid Cards booklet compares the features and fees of 16 pre-paid cards that are now available in Canada. With many of these cards, you have to pay a fee for different types of transactions - such as making purchases, reloading money onto the card and making inquiries about card balances. Some cards also have monthly maintenance fees, and several have time limits on how long you can use them before the remaining balance becomes subject to a fee or, in some cases, is forfeited outright.
If you do find a pre-paid card that interests you, make sure it's a good fit for how you want to use it, and be sure you understand the terms and conditions associated with it. By shopping around, you may find another product, or combination of products, that suit you better. For example, a low-rate credit card, or a low-cost bank account with a debit card, might be a more attractive option.
Pre-paid Cards is the latest addition to FCAC's comprehensive credit card information kit Credit Cards and You. The electronic and print versions of this publication contain data on nearly 200 credit cards available in Canada.
Consumers can use the interactive, on-line version of Credit Cards and You, or they can download Pre-paid Cards and other FCAC publications, by visiting the Agency's Web site at: www.fcac.gc.ca.
You can also obtain a print copy of these publications free of charge by calling FCAC, toll-free, at: 1-866-461-3222.
FCAC is a federal government agency that protects consumers' rights and provides them with information about financial products and services.
- News Canada
Pensioners, Watch For This Important Tax Change
Keeping up with the latest tax changes can be a challenge for all of us.
This year the biggest change for pensioners is an increase in the maximum eligible pension income credit. Previously $1,000, this credit is now available on the first $2,000 of pension income.
Money-saving changes like this one will be programmed into reputable income tax preparation software. This year, consider an Internet product like UFile.ca, which allows you to try it before you buy. UFile also does not charge for taxpayers with total income of $25,000 or less; it also offers a special day when seniors aged 60 and over can 'sign up' to file for free regardless of their income (though they needn't actually file that day). This year, "Free File Friday" is scheduled for February 23, 2007.
Mustapha Maynard
CENTUM Mortgage Specialist
http://www.centum.ca/Mustapha_Maynard/
Monday, February 5, 2007
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