What is typically seen in an assignment purchase in Real Estate is the following.  One party purchases a property pre-construction from the builder.  Prior to taking possession, they sell their right to buy this property to a third party (party two), who is the new purchaser of the property.

It can be of benefit to purchase a property through an assignment.  Since the property is not yet complete, you can usually get it a little below the market value.  If you are looking at purchasing this way, a few things to keep in mind:

–          Right to assign – Does the seller have the right to assign the property?  This should be written in their original purchase agreement

–          Layout & space – Often you’re not able to see the unit as it’s not yet complete, so review the plans and make sure the space, layout & view are what you’re looking for.  All of these will affect the future value of the condo.

–          Comparables – Check the value of similar properties in the area.  If you’re working with a realtor, they should be able to assist with this.

–          Mortgage – Many lenders have restrictions on assignment purchases.  Some will not do them at all, and others will honor the original purchase price only, not the new price based on the assignment.  In the latter case, additional money may be needed for the down payment to make up the difference.  If you’re working with a good mortgage broker, they can help.  Since they work with a variety of lenders, they know which will finance based on the assigned price.

Purchasing a property on assignment can be great way to buy real estate.  Prior to doing so, do you due diligence to ensure there are no surprises.

As society becomes more & more dependent on credit, establishing and maintaining your credit continues to increase in importance.  More & more business are checking with the credit agencies before they decide to extend products or services to you.  The main areas this can be seen are with shelter, transportation, employment, self-employment and utilities.

Shelter – Most people are aware that having good credit is necessary to arrange mortgage financing.  While there are options for those with poor credit history, generally more down payment is required, and higher rates apply.  What many don’t know is your credit is also being used by many landlords prior to renting a unit.

Transportation – Unless you have $20,000 to $30,000 for a new car, it cannot be purchase without credit.

Employment – Many employers conduct background checks, which may include checking an applicant’s credit, prior to extending an offer of employment

Self-Employment – Most business start-ups require sizable amounts of money.  If you do not have savings, then credit, among other things are essential for business loans & financing.

Utilities – Utility companies such as phones, electricity & gas typically require a credit check prior to connecting their services.  If there have been past issues, they may request prepayment or a deposit up front.

Should you fall upon challenging times and you’re not able to main all of your obligations, it is important to be proactive and speak with your creditors.  Many may be able to extend payment holidays or decrease the minimum payments – particularly if you have a long history of good repayment.  If times do not improve and you’re not able to meet your obligations, speak with a credit counselor or trustee, as a consumer proposal or bankruptcy may be your best option.  When things begin to improve, it’s essential you begin to re-establish credit to show lenders despite past challenges, you know how to use credit properly.

To celebrate the launch of the Dominion Lending Centres line of credit cards, we would like to provide a list of 10 tips to help you use your credit cards wisely. The list provided is from the Financial Consumer Agency of Canada:

1 – Know what you’re getting into. Read the terms and conditions carefully, as you’re entering a legally binding contract.

2 – Continue to live within your means and budget. Having a credit card does not increase the amount of money you have.

3 – Your goal should be to pay off your balance in full by the due date of every month. If the balance is not paid in full, most credit cards will charge daily interest back to the date of purchase.

4 – If you find you are carrying a balance, and practically if the balance keeps increasing, stop using the credit card until you get your finances under control. Since interest is charged daily, try to pay it off as soon as possible, and check about other credit cards, lines of credit or other options that may be at lower interest rates.

5 – Avoid impulse buys, especially if don’t have the money available.

6 – If your credit card has a reward program, don’t increase your spending or buy things you don’t need just to get points.

7 – Avoid taking a cash advance on your credit card. Unlike regular purchases, there is not grace period and you are charged interest from the date of the advance until it is paid in full.

8 – Talk to financial professionals about your options if you need money for unexpected expenses. There may be options that will cost less than an advance on your credit card.

9 – Make regular payment to help build a good credit history.

10 – Make sure you are aware of all fees associated with your credit card.

Credit cards can be extremely useful and convenient, however, if you are not careful with how you use them, you can put yourself on a path to serious financial trouble.