Building your new home is exciting yet can also be a bit daunting. There are so many decisions to make, choosing kitchen cabinets, flooring, light fixtures, bathroom fixtures and many more. You will need to dedicate yourself from the moment you decide to build to the moment you walk through your new front door.
In most cases, financing is also a significant consideration when planning to build a new home. One of the first things you will want to do is meet with a mortgage specialist to discuss the financing details. It is imperative that you understand how the mortgage process works when undertaking a project such as building your own home.
The mortgage specialist will need to know whether you are planning to hire a contractor, and have all the details of the house worked out in the contract, or if you plan to act as the general contractor responsible for arranging delivery of materials and hiring/coordinating the trades people throughout the project. He or she will also want to know the following:
WHO: Contract or Self-Build
WHAT: Contract or Construction plans with quotes/cost estimates
WHEN: Start date and completion date
WHERE: Purchase a lot or already own the lot

Contract Build
If you have decided to go with a contractor, you will want to eliminate all possibilities of confusion or oversight by reading your contract thoroughly and making sure that you understand it.
There are typically two types of contracts, turn-key agreements and construction agreements.
“Turn-key agreement” This construction is financed by the builder and paid by the purchaser either at the time of completion or possession date. A mortgage for this type of construction is very basic, in that your mortgage will be advanced at possession date and your payments will start thereafter as agreed upon.
“Construction agreement” This construction is financed by the purchaser and paid in installments. Also known as progress payments, the agreement is based on inspections verifying the percentage of completed work. Once your home is 100% complete and ready to move in the final payment is made. Most contracts will request four installments, after you have paid your deposit and down payment. At the completion of every stage the builder will ask for an installment at which time your mortgage specialist will send an appraiser to verify that the work is complete.
Extras or cost over-runs: As you are building a home, there are almost always some changes that are made along the way. You might decide to make a change to your kitchen cabinets, flooring, bathroom or lighting fixtures. Generally speaking, any upgrades you make from the original contract/plan should be discussed with you mortgage specialist, unless you intend to pay for them with cash.
Features that are not usually included in a construction contract are landscaping, decks, driveways, sidewalks, water and sewer, sunroom, light fixtures, window treatments or appliances. If you are purchasing built-in appliances you will need to consider installation/hook-up fees.

Mortgages for a “construction agreement” are a little more complex than a “turn-key agreement” in that your mortgage will be advanced in stages according to the percentage of construction completed. You will be required to pay interest on these advances up and until your possession date. Upon the final payment you will start with your full payments of principle and interest as agreed upon in your mortgage terms. Remember that when a builder commits to a 6-month possession date, there might be delays due to weather, late delivery of materials or difficulties in scheduling of trades.
Self-Build or acting as General Contractor
You need to gather all the information, house plans, written quotes for all material and labor for the construction of the house as well as for the lot requirements such as driveway, landscaping, well and sewer, hydro and gas services to the house. It is usually recommended to obtain at least two quotes and then decide which is best for you based on reputation, experience, price and/or availability. The mortgage advances are administered in the same way as the “construction agreement” discussed above.
As with most projects, good planning leads to the best success.

Your business plan is done, the permits and paperwork are in place, the stock is in supply, and all that’s left to make your small business a success is for the customers to start calling. But who are these customers, and how do you reach them?

The first step is to create an image of your Best Customers. Be as descriptive as possible: who are they, where do they live, work and play? This will help you send the right message and ensure it hits the right target. You likely won’t be able to sell a lawn care service to an apartment dweller no matter how cleverly you package it.

Next you need to define what the benefits of your product or service are to that potential customer. How will you make someone’s life easier, more enjoyable or safer? Remember you can’t be all things to all people, so choose the ONE thing that will make you irresistible to that ONE customer.

Once you have these two elements in place, use these simple tips to put your business in the spotlight.

Website

Even if you have never had your fingers on a computer keyboard, no small business should be without a website in today’s marketplace. It can function as an electronic brochure, a product catalogue and a handshake to your customers before you even meet them.

If cost is a factor, enlist the services of a student, keen to show off their talents and build their portfolio. Just remember that a simple, clean design is more favourable than one that is complex and confusing. A poorly designed site will frustrate visitors and you’ll never know you lost them as potential customers.

A website is only as effective as the content you provide, both text and photos. You can provide details and specifications about your products and services, and answer questions that would otherwise tie up valuable personnel time.

Include your web address on your answering machine message, and your website can ‘take over’ whenever you’re not available, after hours or busy providing service to other customers.

Update information on your website on a regular basis, you may want to include a ‘What’s New’ page for more timely topics. A site with dynamic and up-to-date information will indicate you care about providing a service to your customers and have the same attention to detail that you have for all the other aspects of your business.

Email

In conjunction with your website, email is a flexible and cost-effective method of staying in touch with your customers, and piqueing the interest of new ones. Invite people to register for email notices, either at point of sale, on your website or whenever you hand out a business card. These are people who have now expressed an interest in what you have to sell, don’t let them get away. You can inform them of upcoming promotions, sales events, new products and any business news that will keep your name and products in their minds.

The actual email can be brief and invite people to click on links to your website. Include a link at the bottom of the email if someone should wish to be removed from your list, and also indicate that you will not share or sell their information. Don’t overuse this method; no one likes a ‘spammer’. Spam is the electronic version of junk mail and an unsolicited email may alienate some potential customers.

Business Cards

Never leave the house without a supply of business cards in your pocket; you never know when you may encounter a client-in-waiting — at the grocery store, the bank or a sporting event.

Not only will you appear professional but also you will be viewed as an enthusiastic ambassador for your business. Look at that seven and a half inch square piece of paper as an invitation for someone to contact you and learn more about you. And they can choose the time and method that is right for them: in person, by telephone or via a website and email.

Keep Your Customers Happy

It may seem like a simple concept, but you may overlook the potential of the customers you already have in the quest to find new ones. Enthusiastic quality service will help your business thrive, whereas even one disgruntled and vocal client can do your business irreparable harm. Keep in touch with your past clients, even if they are no longer in the market for your services. A little attention from you may solidify your place in their minds and initiate a referral at a later date.

As a small business owner, you may be overwhelmed at times with length of your To-Do list, but without ongoing marketing plans your customer lists will shrink in comparison. To market your business effectively your strategies need not be complex or expensive and don’t look at it as selling, you are merely informing people why your business is superior. At every opportunity.

In the sales contract, the sellers of your new home agreed to leave all the light fixtures, custom blinds, and refrigerator. When you walk in the home on moving day, to your surprise, all of those things are gone. In addition, the locks on the back door are broken; there is a huge stain on the living room carpet, and the garage opener doesn’t work.

Although this may be extreme, it could happen, which is why it is important to have a final inspection of the home you are purchasing before the closing. A pre-closing inspection gives you, one last opportunity to verify that you are getting all that was promised in the sales contract. Although buyers still have the legal recourse if they discover-even after closing-that the condition of the home is not as it should be. The best time to identify problems is before closing when the seller will be motivated to correct any deficiencies to close the transaction.

Typically, a buyer takes possession of a property one to three months after signing the sales agreement. But, a lot can happen before the actual move-in. Appliances and fixtures can break down, and walls, carpets and doors can be damaged during the seller’s move-out. Sometimes the seller will have simply forgotten what he or she has agreed upon and would like a chance of it being remedied.

If possible, schedule the inspection right before the closing, such as the day before. Ask your real estate professional to attend the inspection with you. What should you inspect? Using a copy of the sales contract as a checklist, first make sure that all items should be in place (appliances, built-in furniture, window coverings, fixtures, etc.) are there.

Test each appliance to make sure they work properly. Bring along an electrical clock or radio to test each electrical outlet. Test all electrical switches and the garage opener, if there is one. Run the garbage disposal and turn on every water faucet, checking under the sinks for leaks. Flush the toilets. Inspect the floors, carpets, walls and doors for recent damage.

If you discover that something is damaged or missing, make a note of it and inform your real estate professional immediately. In most cases, the seller is usually able to take care of small problems immediately, either by making a needed acknowledgment of the deficiencies and agreeing to correct it. Although pre-closing inspections take time and may be inconvenient, they are important and well worth the buyer’s time.

You apply for a mortgage and are denied. You apply for a car loan and it falls through. Perhaps you should request a copy of your credit report.

Credit reports are strategic for financial and lending institutions to measure a person’s credit responsibility and credit history. With good credit, the world can be at your hands. However, with a bad credit rating, you can be haunted by financial denials for up to seven years. Bad credit can hamper any hopes you may have of achieving financial success. Many people know very little about their credit report and ratings. We are all able to access a free copy of our credit report yearly. The first step though is to understand what your credit report is saying about you.

There are two major credit-reporting agencies in Canada: Equifax Canada Inc. and Trans Union of Canada. These agencies are linked to lending and financial institutions throughout Canada and are regularly updated. When you go to a financial or lending institution, one of the first things they do is access and assess your credit rating. The majority of lending institutions check credit reports through Equifax. To understand the language of your credit report, let’s take a look at some key terms. Account Status: Shows the current status of your account and may show delinquencies that were reported during the previous seven years. Balance Amount: Amount due to the creditor at the time account information was last reported. Credit File: A record of an individual’s credit payment history as reported at a credit reporting agency.

Credit Report – A compilation of credit information presented in an easy to read format. Credit Reporting Agency -Also known as a Credit Bureau. An organization that compiles information from financial institutions, lending companies, and courts to create an individual’s file.

Credit Score – A score based on variables in your credit file that ranks your credit worthiness compared to the rest of the population.

Creditor: – A person or business from whom you borrow or owe money.

Date on File – Date your credit file was started.

Date Open – Date account was opened.

Date Paid – Date account was satisfied.

Date Reported – The last date in which the file was updated by the credit reporting agency with credit information.

Filing Date – Date item was filed with the courts.

High/Limit – The highest balance since the account was opened or the limit on the account.

Inquiry Date – Date your credit file was requested.

Last Activity Date – Date of last activity on the account.

Monthly Payments – Average monthly payment reported to the credit reporting agency.

Original Creditor – Shows the original creditor that turned the account over to the collections agency.

Ownership – Designation by a lender of an individual responsible for payment of account.

Past Due Amount: – Amount currently past due.

Payment Pattern Grid – Shows the amount of time the account was reported past due: 30, 60 or 90 days.

Type of Account: Revolving – an account where a balance is carried over from month to month.

Instalment – An account with a fixed payment for the term of the loan.

Mortgage – A fixed payment account involving ownership or property.

Open – An account where the balance must be paid in full at the end on 30 days.

Once you have ordered and received your free credit report from Equifax, Trans Union or both, then it is time to review your score. Make sure your names, address, Social Insurance Number, and date of birth are all correct and up to date. Secondly, ensure all accounts listed are yours. Ensure the balances, limits and accounts are correctly listed.

What is your credit score?

Your credit score can range from 399 (lowest) to 862 (highest). If your score is between 399 and 550, it is weak and you may not be approved for financial loans or mortgages. The mid point would be 750 and the best credit score would be closer to 862. The higher the score, the better your chances will be for financial approvals. To challenge anything that seems out of sorts on your credit report, contact the reporting credit agency immediately.

To find out how you can improve your credit rating, you can speak to a qualified credit education specialist, your bank loans officer or you can apply for a credit information booklet from one of the credit reporting agencies. The most important objectives are to know what’s in your credit report, report any inaccuracies, check your score quarterly and do your very best to improve your score. Make all your payments on time, be faithful to gratify your loans and don’t apply for credit you know you cannot financially pay back. Ignorance may be bliss but in this case, education is the key to your financial success.

The idea of working at home may appeal in terms of flexible hours, being able to avoid commuting, and ready access to one’s own coffee machine, but the entrepreneur who plans to set up a home business needs to consider many other factors.

What is the market for the proposed service or sales venture? Opening a bed and breakfast establishment may be your fondest dream, but if you live in a low traffic area and there are already five other such facilities nearby, practicality may lead you to reconsider.

Check out the growth rate and other demographics of your community. What types of goods or services are needed? Will your business meet the demands already evident or can you confidently project there will be a need for your services?

Do you already have suitable space or will you need to do some renovations? A separate business entrance may be a good idea. Give consideration to warehouse/storage space, easy access to a bathroom, reception area, and parking. Will proximity to the family’s living area necessitate any changes? You may be comfortable with the happy sounds of children at play and the aromas of your simmering supper, and the presence of pets may be of no concern to you, but customers may have different opinions. And, if you will be responsible for young children as you work, do you have a backup plan if illness and business deadlines appear at the same time? A separate business phone line prevents calls missed due to family member’s using the phone and helps to avoid frustration for all concerned. A home-based business venture must take into account the family’s needs, and family support is crucial for the entrepreneur.

Do you have easy access to postal and delivery services? Will you need to arrange for shipping? Be sure to check out zoning regulations, necessary insurance, permits, licenses and tax considerations. Advertising costs and the price of business stationery also need to be considered. Doing your own correspondence may work well at first, but as the business grows, you may need to hire help. The services of an accountant are recommended. Be realistic in terms of your expectations. It may take three to five years before a new business venture shows a profit.

Check with your local chamber of commerce or with the Manitoba Small Business Association to see if you qualify for the discount rate on processing charge card purchases. An attractive, well managed and easy-to-navigate website is a good investment.

The Canada-Manitoba Business Centre has a wealth of information and resources for small businesses and personnel there can offer valuable assistance for business start up or expansion. Think creatively, do your research, be realistic in terms of your abilities and your commitment, and when you’ve counted the cost and decided it is time to follow your dream, summon your courage and take the first step. You will never know success unless you aim for it.

To help you determine if you are getting the best from your insurance broker on your house, cabin, business or farm insurance:

Are you getting the senior discount you are entitled to?

Are you getting the new house discount?

Are you getting your allowed claims free discount?

Are you getting the mortgage free discount?

Are you getting the applicable alarm system discount?

Is your home evaluation up to date?

Has your insurance broker visited your home, business, farm, or cabin?

Did your insurance broker take recent photos of your property?

Do you feel your insurance broker could represent you well, in case of a claim?

Does your insurance broker communicate in the official language of your choice?

If you answered NO to at least one of these questions, please make an appointment with an insurance broker now.

Make the most of your meeting with a tax accountant by bringing all the documents needed to prepare your tax return.

1.Financial records: This includes deductions, receipts, RRIF, RRSP or other pension contributions, union or professional dues, income papers from a partnership, small business or trust, investment expenses, dividends, brokerage trades, rental agreement, records of investment activity. Also bring receipts from moving expenses due to a new job, alimony total and details of foreign assets.
2.Income slips: Tax slips received due to stocks, bonds, real estate, capital assets, and rental income. T-4s for wages (preferred over monthly paycheck slips because often those have holiday pay or partial holiday pay already deducted). T-3s slips for estates, trusts, partnerships, childcare tax receipts, private pension, copies of tax slips, financial records.
3.SIN (social insurance number): This will give the accountant access to personal information that he/she needs. SIN allows financial information to be retrieved through Revenue Canada in order to receive records that pertain to your life and may be essential when making a claim. Everything can be researched through your SIN.
4.Family Information: Whether you have day care slips, extra curricular receipts, education, tuition or donation receipts (any amount); bring them with you in order to make deductions. Every penny counts.
5.Medical Papers: The list is long; remember to bring with you all receipts with regards to health: prescriptions, eyewear, dentures, injury claims, prosthetics, and crutches. Collect all receipts accompanied by a DIN (drug identification number). It is surprising to note that health store and Watkins products often bear a DIN making these purchases deductible.

If you are missing records, your accountant can often help you track them down. Organize all papers into one file or box marked “Accountant” and that way there will be no need to search through drawers or closets to prepare for a meeting with your accountant. This will make life much easier.

This past 2006 year has brought about the most changes in income tax laws that we have seen since the late 80’s. There is no one that is not affected in one form or other. For some of you, it will mean more money in your pocket, but for most of you, except for the child amount, it will be a shifting of money from the left pocket to the right pocket.

The change in taxation on dividends received from the portion of a corporation’s profit taxed at the high tax rates levels the playing field in terms of taxation with income received from income trusts. The last proposal made by the government to add a tax on income received from income trusts has shifted the balance and income trusts are no longer an effective tool to increase your investment income. As a result the values have declined significantly. You should sit down with your investment advisors and come up with a strategy that will minimize the losses.

The child tax benefit received by eligible parents during the year will be income to the parent with the lowest income. The effect will be a tax of approximately 26% of the amount received during the year.

Having your tax return prepared is no longer simply a method of settling with the government on your share of government expenditures. The return has become an instrument used for a variety of benefits and calculations. Did you realize the information on the return is used for calculating your child tax benefit, your Old Age Security amount, your Old Age Security supplement, cost of living credits, property tax credits, the rent calculation for subsidized housing (most manors), the daily cost for personal care home fees, the GST credits, and for farmers, the CAIS payments and most program payments. It is also used by the financial institutions to verify your credit worthiness. Proper return preparation and proper tax planning has never been more important. Yes, it is more expensive to seek help from the professionals, but the additional benefits far outweigh the additional costs. There is also no price that can be attributed to the peace of mind received.

Why do you need an accountant? Or better yet, why do you need a good accountant? Or even better yet, how do you tell if you have a good accountant?

Most people think the services of an accountant are required only in certain circumstances, such as business startups, business tax requirements, estate planning, or upon the death of a loved one, etc. Others think that accountants are necessary only to prepare personal tax returns and that they have nothing to do after April 30th of the year. Others think that an accountant’s only role is to do the number crunching and prepare the various required tax forms. Actually, the accountant is a professional whose role is far more reaching than most people realize.

Today’s society is full of complex regulations, tax laws, investment possibilities, etc. If you are thinking of becoming self employed or somehow becoming involved in a business, your first resource for information should be a public accountant, much in the same way you should use the services of a lawyer when you purchase a property. They will be able to guide you in as far as sales tax laws are concerned, whether to incorporate or not, help you setup your bookkeeping either in ledgers or on a computer, and help you analyze the business results. They will ensure all of your tax filings are accurate and on a timely basis, help you when seeking financing, and answer the various questions you may have during the year. But before doing any of these things, they should be able to assess your business venture and your abilities and based on this assessment they should recommend as to whether the business venture should be pursued. In the case of a business purchase, they should also be capable of calculating the value of the business to ensure you are not over paying. However, they will not make your decisions, although we do come across some circumstances where the client will not purchase the business without our blessing. A good accountant with sufficient experience will pool the various experiences his customers have had, and use that knowledge to your benefit when possible. Also, remember that a good accountant will appreciate you enough to tell you if your dream is not possible, and if your dream is possible they will be there to help you realize it.

If you are farming, do you need the services of a good accountant or are the services of a tax preparer sufficient? Never has it been more important for farmers to have a good accountant. The current government farm programs require that accountants work very closely with the farmer to ensure that they receive the proper entitlements from all the programs. A simple misclassification of expenses can make a difference of thousands of dollars. We can no longer assume that the calculations made by the government employees are correct. We have also heard of instances where an accountant has told a farmer that the farmer should not bother himself with the programs. What was actually meant was that the accountant did not appreciate the customer enough to do this extra work and to deal with the related frustrations on behalf of the client.

For the farmer and businessperson, another area of increasing concern is the area of estate planning. Traditionally, estate planning has been reserved for events occurring after death. Today when estate planning is done, it encompasses the plan of passing on the farm or business to the children, or of selling the assets, the ensuing retirement plan, the proper distribution of assets after death and of course the minimization of taxes. This is a complex field that definitely requires the advice of many experts including good financial planners that are willing to work with good accountants. Estate planning should not be left for the last minute nor should it be done without consultations with various professionals.

What if you are not in business, you are young, and you do not think you are ready to plan for your estate, you prepare your own tax forms or have a good tax preparer, and do you still need an accountant? Reality is that sooner or later you will need the services of an accountant. It could even be tomorrow. When that time does come, you need to know where to turn, and the present sounds like a good time to explore the field.

Our experience shows us that good accountants will over time save you more money than the fees charged. Bottom line, a good accountant is more like a partner that does not share in your profits but is still looking out for your welfare. Why should you do with less?

Are you currently searching for that dream home? You may be closer to getting it than you think! Here are some facts to consider when financing your new home purchase.

Credit Bureau Score

Your credit bureau score is one of the main factors determining whether or not you will qualify for a mortgage. Your credit score is established by several factors. If you are seeking credit from several financial institutions, and all of these places are looking at your credit bureau, your credit score may decrease. This is referred to as a credit bureau with several “hits”. Another item that can affect your credit score is how you manage your loans and credit cards. If you make your payments on time, your credit score will remain high. However, if you get behind on your payments, or if you are over your limit on your credit card, your score will be hurt. The final item that affects your credit score involves collections, judgments, and former bankruptcies. Usually collections and judgments must be cleared up before an institution will look at approving a mortgage for you. However, there are lenders that will take people with former bankruptcies, even upon discharge. After seven years, credit blemishes are normally taken off of the credit bureau. So even if you have credit blemishes, there is still a good chance that you can purchase a home.

If your credit score is high, you will qualify for programs with the best rates available on the market today. However, even if your score is not as high as you would like, there are lenders that will accept clients with less than perfect credit, and will still charge you reasonable interest rates.

Down Payment

If you ask someone who is renting what is holding them back from purchasing their own home, chances are they will say that they can’t save up for the down payment. There are many options available today for people who don’t have a down payment. One option to look into is if you qualify for a zero percent down mortgage, whereby the bank does not require a down payment. If you have never owned a home, or have not owned a home for four years, you can use your RRSPs for the down payment, through the Home Buyers Plan (HBP). Another option for the down payment is for a family member to gift you the down payment. A line of credit, credit card, or a personal loan can also provide the funds for a down payment. Many institutions out there also offer a cash back program. This means that as long as you can come up with the 5% down now, when the mortgage goes through the bank will give you 5% back. The cash back program can also provide you with a source of funds for other purchases, such as furniture for your new home.

Debt-to-Income Ratios

Another factor that financial institutions look at is the client’s debt-to-income ratios. This means that your total payments must be less than 40% of your total income. For example, let’s say that the mortgage payment on your new home will be $600. You have credit card monthly payments of $100 and your loan payment is $275. Based on a single income of $30,000, your monthly gross income (before taxes) is $2500. Your ratio would then be 39%. Debt-to-income ratios can often be lowered through debt consolidation. Please speak to a qualified mortgage agent for other ways you can lower your monthly debt payments.

Other Costs to Consider

Final points to consider when looking at purchasing a home are the miscellaneous costs that are incurred. Property taxes must be paid yearly. Most institutions have a property tax savings account whereby the taxes are included in the monthly mortgage payment. The institution then sets aside the tax payment portion until taxes are due. The tax payment is then drawn from this account, automatically allowing the client to save for property taxes. Lawyer fees are another cost incurred when purchasing a home. Lawyer fees tend to be 1.5% of the purchase price of the home.

Home building and content insurance must also be purchased every year to protect against loss through fire and other perils. Other costs that clients sometimes don’t consider are home maintenance items, such as a lawn mower or snow blower, which are also needed when you own your own home. People often purchase new furniture as well. It is wise to consider all costs involved before purchasing your new home.

Closing Thoughts

Purchasing a home is the largest investment most people will make, so take your time in finding a place that is suitable for your needs. Owning a home has many benefits, including allowing you to build up equity, which is a great way for you to automatically save money for the future. Most importantly, however, is the pride that you feel in owning your own home and the freedom that you have to make any changes to the property that you like. Make 2006 the year that you purchased you new home!