Fall House Maintenance

Timing of the seasons varies not only from one area of Canada to another, but also from year to year in a given area. For this reason, we have not identified the months for each season. The maintenance schedule presented here, instead, is a general guide for you to follow.The actual timing is left for you to decide, and you may want to further divide the list of items for each season into months.


Have furnace or heating system serviced by a qualified service company every two years for a gas furnace, and every year for an oil furnace.

Open furnace humidifier damper on units with central air conditioning and clean humidifier.

Lubricate circulating pump on hot water heating system.

Bleed air from hot water radiators.

Examine the forced air furnace fan belt for wear, looseness or noise; clean fan blades of any dirt buildup (after disconnecting the electricity to the motor first).

Turn ON gas furnace pilot light.

Check and clean or replace furnace air filters each month during the heating season.Ventilation system, such as heat recovery ventilator, filters should be checked every two months.

Vacuum electric baseboard heaters to remove dust.

Remove the grilles on forced air systems and vacuum inside the ducts.

If the heat recovery ventilator has been shut off for the summer, clean the filters and the core, and pour water down the condensate drain to test it.

Clean portable humidifier, if one is used.

Have well water tested for quality. It is recommended that you test for bacteria every six months.

Check sump pump and line to ensure proper operation, and to ascertain that there are no line obstructions or visible leaks.

Replace window screens with storm windows.

Remove screens from the inside of casement windows to allow air from the heating system to keep condensation off window glass.

Ensure all doors to the outside shut tightly, and check other doors for ease of use. Renew door weatherstripping if required.

If there is a door between your house and the garage, check the adjustment of the self-closing device to ensure it closes the door completely.

Ensure windows and skylights close tightly.

Cover outside of air conditioning units.

Ensure that the ground around your home slopes away from the foundation wall, so that water does not drain into your basement.

Clean leaves from eavestroughs and roof, and test downspouts to ensure proper drainage from the roof.

Check chimneys for obstructions such as nests.

Drain and store outdoor hoses. Close valve to outdoor hose connection and drain the hose bib (exterior faucet), unless your house has frost proof hose bibs.

If you have a septic tank, measure the sludge and scum to determine if the tank needs to be emptied before the spring.Tanks should be pumped out at least once every three years.

Winterize landscaping, for example, store outdoor furniture, prepare gardens and, if necessary, protect young trees or bushes for winter.

[Source: CMHC - http://www.cmhc.ca/en/co/maho/gemare/gemare_003.cfm]

Mortgage Insurance Guarantee Parameters

On Friday, September 19, 2008 the Department of Finance issued its final mortgage insurance guarantee parameters and accompanying explanatory notes. The final guidelines follow the initial announcement on the financial guarantee for mortgage insurance providers issued July 9, 2008 by the Department of Finance.

There are two noteworthy changes from the draft parameters:

1. Elimination of reference to a Total Debt Servicing (TDS) number, replaced by a principles based approach;
2. Reduction in minimum credit score to 600 from 620. Three percent “basket” for flexibility remains;

These modifications follow discussions with stakeholders, including CAAMP. CAAMP through its submission focused its comments on the minimum credit score and welcomes the decision by the Department of Finance to adjust the credit score.

Protect yourself against Identity Theft

With technology today, it's more important than ever to keep your private information safe.
Identity theft occurs when someone uses your personally identifying information (like your name, Social Insurance Number, credit card number, etc.) without your permission to commit fraud or other crimes. It has become a serious problem for many Canadians and has been discussed at length on numerous television broadcasts across the country.

Identity theft is serious. While some identity theft victims can resolve their problems quickly, others spend thousands of dollars and weeks of time repairing damage to their good name and credit record. Some consumers victimized by identity theft may lose out on job opportunities or even be denied loans for mortgages, HELOCs (Line of Credits), education, or cars because of negative information on their credit reports. In rare cases, they may even be arrested for crimes they did not commit.

Here are some tips on how to reduce your risk of becoming a victim of identity theft:

• Carefully check over your bank and credit card statements every month. Immediately report any discrepancies in your monthly statements to your financial institution.
• If you suspect theft, obtain your credit report through such organizations as Equifax and TransUnion and verify all information.
• If you are a victim of identity theft, follow-up every six months to ensure that someone has not tried to use your identity again.
• If you lose your credit cards or they are stolen, file a police report and contact all your creditors to advise them of the fraud and to halt all transactions immediately.
• Protect your Social Insurance Number. Do not give it out, except when it is absolutely necessary, such as when starting at a new job or when dealing with federal government departments.
• Do not carry your SIN card in your wallet. In today's world, there are likely to be very few instances where you will need to know your SIN number. If you do use it more often than most, memorize the number and leave the card in a safe place at home.
• Speaking of leaving things behind, don't carry your birth certificate around with you unless absolutely necessary, especially if you already have a driver's licence.
• Be wary of pre-approved credit card applications and shred unwanted ones. Thieves can often obtain the cards under your name. If you do get a new credit card, sign it as soon as you receive it and cancel credit cards that you no longer use.
• Shred or rip up bank statements, receipts, or other documents containing account numbers and personal information. Do not recycle the paper.
• If you move, ensure your mail is forwarded or re-routed so that it can only end up in your hands.
• Never provide personal information such as SIN, credit card numbers, or a PIN over the telephone unless you initiate the call.
• In the modern world of passwords-for-everything, we often have a difficult time remembering the passwords for all of our access levels. However, it is important that you avoid keeping a written record of your bank PIN number and computer passwords, as it allows a thief to easily access all of your information by stealing a single document. And, of course, never keep this information in your wallet.
• Put passwords on your credit card, bank and phone accounts but avoid using easily available information like your birth date, your phone number, or your mother's maiden name. Don't give out your passwords to friends or co-workers - especially if you use a generic password for all accounts.

[source: CAA eLetter September 2008]

Cash Back Mortgages Examined

After the federal government prompted the end of $0-down insured mortgages in July, speculation immediately started about how people will get around this new restriction. Cash back mortgages quickly took centre stage.

Cash back mortgages have been around for a while. They effectively let people finance beyond the 95% loan-to-value limit and were a precursor to 100% financing.
Now there's a chance cash-back mortgages will also be on the chopping block.

The Department of Finance knows full well how cash-back mortgages can simulate 100% financing, and they'll likely provide public comment on them at some point. (We've asked and are awaiting response.)

In the meantime, Canada's biggest bank, RBC, says it "will not offer cash back as a financing alternative to the 5% down payment."

In addition, TD--which last month sent an email to brokers confirming its cash back products--said in the Globe & Mail that it will be "revisiting" whether to keep certain cash back products in the market. TD said, "once they have clarified things" they may "pull" one or more of their cash back products.

As of today, however, TD still had ads on its site for the CashBack Down Payment Mortgage. The product's tagline says: "Not having a down payment doesn't need to keep you from buying a home."

One thing's for sure, cash back mortgages are worse than the 100% financing they'll replace.
We don't want to pick on TD, but for illustration we'll use their CashBack product as an example. TD sends 5% of the purchase price to the borrower's lawyer on closing. All one has to come up with is 1.5% for closing costs. It's a nice little dance around the new 95% loan-to-value rules.
The cost of this generosity is at least a 1.35% higher interest rate. That's because TD charges 6.85% for this product (as of today) and one can go elsewhere and get 5.50% or better on a non-cash-back mortgage.

So let's assume you buy the average Canadian house for $302,298. You put down 5% of your own money and get a mortgage with a 25-year amortization at 5.50%. This will cost you $74,124 in interest over five years.
If, however, you use TD's money for the down payment (i.e. TD's CashBack Down Payment Mortgage), you'll pay an extra $18,755 in interest--according to our calculations.
If you put up that $15,114 for the down payment yourself, you'd save all of this interest. It would be like earning 124% on your down payment money in five years--or 17.5% a year after taxes!

Rob Carrick of the Globe & Mail also warns that banks charge big bucks if you break a cash-back mortgage early. The additional interest penalty can be thousands of dollars. You'll also have to pay back a pro-rated amount of the cash back if you exit before maturity.
We had a client who got $25,000 cash back but then wanted to refinance a year into his 7-year cash-back mortgage. He had to pay back over $9000 in penalties plus repay $21,400 of his cash back.

Another big downside to cash-backs is that they're generally unavailable with variable rates. Most of our readers know that, statistically speaking, variable-rate mortgages entail less interest over the long-run.

Don't let us be the only detractors, though. Here's a small sampling of what others have to say about cash-back mortgages:

"The math is not beneficial to clients. They always will lose." - Vince Gaetano, Monster Mortgage
It's "a horrible product" - Jim Tourloukis, Advent Mortgage Services.

"Banks never offer their best rates on a Cash-Back mortgage." - True North Mortgage
Million Dollar Journey has an excellent discussion going on the topic if anyone is hungry for more information.

(All above figures are as of September 2, 2008)

[source - http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2008/09/cash-back-contr.html]