Advantages and Disadvantages of a Joint Mortgage

Many Canadians are looking for a joint mortgage, on the one hand because the new mortgage rules make individual qualification more difficult and on the other hand to mitigate financial risks, not to mention that homes in Canada are just not what they were. However, is it a good idea? It turns out that there are many reasons why a joint mortgage is not necessarily a good idea. Let’s take a look at some advantages and disadvantages:

Advantage: a smaller down payment

 Advantage: a smaller down payment

Usually, the minimum down payment required to qualify for a mortgage is 5%. To avoid paying mortgage insurance from CMHC, you will need a 20% down payment. If you are looking to buy a house worth $ 500,000, the first installment will be very expensive. Sharing your mortgage with another person makes your first payment more accessible and your mortgage payments significantly lower.

Disadvantage: the other person decides to leave

Obtaining a common mortgage may seem very advantageous on the financial side at the outset; however, if you or the person with whom you have chosen to share the mortgage decides to leave, you may find yourself in a very difficult situation. You might not be ready to compensate for each other, which could result in an early sale, this is not your initial wish.

Benefit: increased accessibility of a mortgage

Buying a common mortgage property can also result in an increase in purchasing power in that the maximum mortgage amount increases. If you and your mortgage partner share the purchase of a new property, you can have access to a larger and better located property, and therefore a better lifestyle.

Disadvantage: one of them loses his job

It could happen that your mortgage partner loses their job, and the same thing could happen to you as well. In this situation, one of you will have to take charge of the other and when this happens, the many financial benefits of a joint mortgage begin to lose their value. Here are some relevant questions to ask yourself: How long do you have to cover other costs? When can the other person repay you? Of course, one way to reduce the risk of this happening is to jointly contribute to a savings fund, but the fact remains that the scenario mentioned above remains likely.

Advantage: Less expensive maintenance

When you share the costs of a mortgage with someone else, you also share the maintenance costs of the property you choose to buy. The mutual benefits are easy to notice: if the roof needs to be repaired, if there is a fault with the hot water tank or if the windows need to be renovated, you will be able to share the expenses. It’s easy to find comfort in the fact that you do not have to pay these maintenance costs alone.

Disadvantage: Friendships do not always last forever

 Disadvantage: Friendships do not always last forever

The same story that always comes down to collocated friends is also about common mortgages: money can sometimes break ties of friendship and family ties. In fact, only the difference in lifestyle choices between the two can make the connection incompatible and that would be a good reason in itself to avoid a financial transaction like this. Be very careful when choosing your mortgage partner because the financial consequences can be very serious if things do not go according to plan.

A final important point: although there is no denying the attraction of sharing the high costs of a mortgage or house with a close friend or spouse, putting both names on the mortgage and the property may have other undesirable effects. For example, if you are both attached to a mortgage, you will have trouble qualifying for another mortgage (individually or collectively) if you choose to buy another property in the future. If any of you can avoid legal interleaving, you will have easier access to approval of future loans.

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Can I have a pension from IMSS and ISSSTE?

Image result for IMSSWhen the time comes, a series of decisions that involve many aspects of personal life behind them. It is about retirement, that moment that has come after hard years of work and service in the public and private sector.

When talking about the public sector there are different schemes for retirement, including a pension. In this article we will review some of the main features of this retirement method and, of course, we will find out if it is possible or not to have a pension granted by the Mexican Institute of Social Security along with a pension given by the Institute of Social Security and Services of the State Workers (ISSSTE). First of all, it is convenient to know what a pension is .

In this case, both the IMSS and the ISSSTE define this as an economic benefit that is intended to protect workers when they have an accident at work, suffer from an illness or a non-work accident or when they reach 60 years of age. Here we will talk about pensions that are intended to be granted in retirement, that is, when they turn 60.

  It is important to clarify that, in case of the death of a worker, he has the possibility of leaving a pension to his family members who in this case are known as beneficiaries and who may be children, wife or husband, or in any case, the parents.

The granting of any type of pension is based on the delivery of a resolution that supports the right to payment of a monthly amount and the medical service provided by both the IMSS and the ISSSTE.

The types of pensions of the IMSS

First, we will talk about the type of pensions granted by the IMSS. The Social Security law establishes two regimes by which insured persons can retire. The manner in which these two procedures are determined is established through the date of beginning of contribution to the Insurance and is determined in persons who began their work before July 1, 1997, this is known as the “1973 Regime”; or if they started trading after July 1, 1997, the “1997 Regime”.

All workers in the private sector have a guaranteed minimum pension in case they have not made voluntary contributions or affiliations to an insurer. In this case, the minimum guaranteed pension is that which the federal government insures to pensioners under the Social Security Law and its monthly amount is the equivalent of a general minimum wage in Mexico City. Likewise, this amount is updated annually in the month of February according to the National Consumer Price Index (INPC) published by the National Institute of Statistics and Geography (INEGI).

When a social security worker has chosen to choose an insurance company as the accumulator of the balance in the individual account administered by its Retirement Fund Manager (AFORE), this pension is defined as the annuity pension. In our article All you need to know about the IMSS pension types , you can find out more about this topic.

The types of pensions in the ISSSTE

Image result for pensionThe differences between the pensions granted by the IMSS and the ISSSTE are minimal. However, each of them has aspects that are important to take into account. As we established, an insured of the IMSS will receive his pension from the services he provided to private sector companies.

A worker who did the same for government agencies will receive a pension from the ISSSTE. In this institution, since 2007, active workers had the possibility to choose between two different schemes for the granting of their pension.

The first of these modalities is known as “Tenth transitional” and applies to workers who were working as of March 31, 2007 and elected, and for workers who were working on that same date, but did not exercise their right to choose.

The compensations for the tenth transitional period consist of a calculation in the years worked and the average of the base salary quoted during the last year worked before retirement. As in the IMSS, the guaranteed minimum pension to be granted is equivalent to a minimum monthly salary in Mexico City.

On the other hand, the other regime promoted by the ISSSTE is known as “Ordinary Regime (individual account). Here, the amount allocated to each worker corresponds to the resources accumulated by him in his individual account for all the years worked, his amount is determined at the time of retirement based on the contributions that have been made up to the last day worked. The pensions are granted by the ISSSTE and the worker chooses the payment method through an insurer or an AFORE.

This regime is applied to the workers who were working as of March 31, 2007 and who elected them, and to those workers who were not working as of March 31 and who joined or re-entered to contribute to the ISSSTE as of April 1, 2007. that same year.

As in the IMSS there are different conditions to receive the pension, in the ISSSTE there are also. Some of the main ones that interest us most in this article are the following. In the Individual Account System, workers who have paid or worked for 25 years and have just turned 60 can retire.

This modality is known as Unemployment in advanced age. The other very similar modality, but with 65 years of age is known as Old Age. On the other hand, in the regime of the tenth transition, the Retirement corresponds to men who have worked for 30 years and women who have done so for 28 years, have met a minimum of 58 years in the case of men and 51 years in the case Women’s.

To this regime is also added the modality known as “Age and time of services” for people who have worked for 15 years or more in the sector and who have turned 58 years old. There is also unemployment in old age when you have worked for 10 years and the worker turned 63 years.

You should know that as a pensioner of the ISSSTE, you enjoy a series of very important rights. You can meet them in our article: Know the rights of the Retirees and Pensioners of the ISSSTE , do not stop reading it.

And then can you have a pension from the imss and the issste?

Image result for imss pension

Is it possible to have and collect a pension when the IMSS and the ISSSTE have been quoted? The answer is yes. In terms of pensions, in 2009 both institutions signed a portability agreement whose purpose is to demonstrate that the right to an economic benefit is associated to the person and not to the type of employer who uses it, so that, if in your career You decided to go from the public to the private sector, your effort has counted equally. Processing your pension in these two modalities is simple.

If you wish to retire by retirement, unemployment in advanced age, old age or retirement, under the modality of portability of rights the only thing you must do is process and obtain, before requesting your pension, the record of periods recognized by both Institutes for the work done in both sectors.

It is important to highlight that the application to start the processing of your pension must be submitted at the last institution to which you have contributed or in which the most recent withdrawal is recorded. In both cases, for that special date, you must already be discharged as a worker.

Thanks to the Internet, both the IMSS and the ISSSTE have made available to their insured special tools to know their type of pension or the weeks they have quoted in one or both institutions. Surely at this point you have everything under control or you are ready to say goodbye and start new projects. Congratulations! You have reached a great stage in your life. 

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4 Steps to Eliminate Your Ant Spending and Save $ 15,000 a Year

You could say that we all have the interest to save, however, at the end of the month we do not know where our money was and we did not save the amounts we wanted.

Saving without a doubt is a difficult challenge, since low wages have not increased in the same way as the prices of products and services have. But make it a difficult challenge, it does not make it impossible. There are many expenses that we can cut, without our lifestyle changing too much, for example: spending ant. Do you know how much money is going to you in those small and unnecessary expenses that you do not give importance to but that, added, do affect your portfolio?

Ant spendingImage result for spending

Ant expenses are derived from unnecessary purchases that go unnoticed for different reasons. Normally, we give greater importance to the most significant purchases and expenses, than to the small expenses, because when disbursing 20 or 30 pesos, we do not believe that it affects our economy, but what happens if we add up all those expenses each month?

They represent 12% of our income, according to the Condusef. The 12%! It is more than 10% that it is recommended to allocate food or education expenses monthly. At the end of the month, the ant expenditure turns out to be significant.

What unnecessary expenses do Mexicans have?

Some of them are coffee, sweets, cookies, chips, cigars, beers, bottles of water, tips, commissions in shops, etc. So, assuming that a person has an income of $ 10,000 per month, these ant expenses would represent about $ 1,200 per month and about $ 14,400 per year.

Now let’s think how much do we save for an unforeseen event or for an emergency fund? How much money are we saving for our retirement? How much money do we need to meet personal goals? If the answer is very little or nothing, then it is time to find what our ant expenses are and cut them out or eliminate them.

Find your savings opportunities

Image result for opportunitiesThe expenses ant are different for each person, that is to say, there are small expenses that while for some they are unnecessary, for others yes they influence in their way of life. Therefore, it is up to each person to find out what are the small and unnecessary expenses that we do not give importance to, but which, added together, are preventing us from achieving bigger things.

There are expenses that are more complicated to eliminate, but you can find ways to reduce them. An example is subscriptions to services such as Netflix or Spotify. The monthly subscription for a person of these services costs $ 109 and $ 99 per month, respectively. This represents an annual expense of $ 2,496. If you hire the Netflix Premium Plan for four screens, which costs $ 199 per month and you share it with three other people, and you hire Spotify for yourself and up to 5 friends or relatives, which costs $ 149 per month; your annual expense would be $ 895. You would be saving $ 1,601 a year!

Sharing some expenses is a great way to save money while still using certain products or services.

It is important to know these data to organize and plan your personal finances. In just 4 steps you can start converting your ant expenses into savings and a good idea is to rely on fintech, or financial technologies, both to make a budget and to make your money work through investments.

4 steps to reduce your ant spending and increase your savings

1. Identify the total amount of money you receive per month and establish the essential needs.

For this, in Finerio we recommend the 50/30/20 rule.

The rule says that you must allocate 50% of your income to basic needs such as rent, food, services and transportation. 30% can be for lifestyle and entertainment expenses. 20% should be used for savings. In this way, you will see that it is easier to organize and plan your expenses with the money you have available. If you have spare, always save it.

2. Make a budget and implement the 50/20/30 rule.

Image result for opportunities

Calculate everything you spend in the month, the more specific your budget, the better because you will avoid unnecessary expenses. Having a budget does not mean quitting going out and eating the same thing every day. It means establishing your priorities and adjusting some expenses according to your needs.

We know that sometimes it is tedious to make a budget, but with Finerio you can do it in a simple way and track your expenses in an automated way. You can link your bank cards and have all your information in the same place.

3. Take courses or research personal finance.

Financial education is essential to achieve much with little, if necessary. An education of this type will allow you to choose the financial instruments appropriate to your needs.

It is important that you inform yourself about the investment instruments that exist in the market, so that you choose the most suitable one for you and you can grow the money you save by eliminating your ant spending.

4. Invest.

Once you have organized your expenses and know the financial instruments that exist to improve your finances, start investing. Neither should you be an expert, opening an investment account is as simple as opening a savings account. You just have to inform yourself to make the best decision.

Currently, digital investment platforms have more accessible processes than those of a bank and generate better returns. You can start investing from $ 100. That’s right, that money that you will save on sharing Netflix and Spotify, you can put it to work now.

Finally, order your financial priorities and create a budget based on the Fintech. Say goodbye to unnecessary expenses and you can save even more than $ 15,000 a year, if you take advantage of the investment instruments. With it you will fulfill goals that you thought were difficult to reach. You just need a little effort and be constant. Leave us your comments and tell us what ant spending you can eliminate from today?

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