making the move off-campus – part one

Last week I shared some financial tips for new professionals.  Now it is time to turn our attention to those making the move off-campus and stepping on to the property ladder.

Buying a home is the most expensive purchase you will ever make.  Taking time to do your research is crucial.  There are a lot of incentives for first-time buyers, but there are also a lot of hidden/unexpected costs associated with purchasing a home and maintaining it.

Getting a Mortgage
First, make an appointment with a Financial Advisor (FA) at your bank to see what mortgage you would qualify for.  There is nothing more heartbreaking than searching for a home, finding one you love, then finding out you don’t qualify for the mortgage.  Sometimes an FA will ask if you have looked at any houses and if you have the MLS listing (get very familiar with MLS – www.mls.ca) to use as a starting point.  For example, if you’ve seen a couple of houses that you are interested in, one is $225,000 and the other is $325,000, the FA will see if you qualify for the higher mortgage first.  You’ll also need to know how much money you have for a down payment.  If you have $25,000 to put down, then the mortgage would be $300,000, and the FA will check if you qualify for this amount.  If everything comes back clear, you can get the ball rolling (and let me tell you, once the ball starts rolling it moves FAST).  If you don’t qualify for that amount, the FA will work with you to find a mortgage that you’ll be able to carry.

If your down payment is less than 20% of the purchase price, the Canada Mortgage and Housing Corporation (CMHC) will apply mortgage loan insurance to your mortgage.  Your Financial Advisor will work out what this additional cost will be.  This cost gets added to your mortgage total, and is incorporated into your monthly payment.

Your Financial Advisor will also outline what types of mortgages (fixed and variable), terms (1-5 year), amortization (20-30 years) and interest rates are available.  This link is a great resource, outlining the major terms associated with mortgages: http://www.tdcanadatrust.com/mortgages/glossary.jsp#M

Finding a Realtor
If you don’t know where to start, ask around.  Ask people you know who have recently purchased a home in the area who they used.  Also, try going to some open houses.  Every open house will have a Realtor on site.  You will get a sense of their style (are they too pushy, follow you around the house while you’re looking, or welcome you and let you look around and follow up with you at the end?) and give you an idea of what it would be like to work with them.  Most Realtors at an open house will ask you if you have a Realtor.  If you think they’re too pushy, don’t feel bad about telling them that you do (even if you don’t).  If you seem to like their style, make sure to take their business card, and get in touch with them after the open house.  Most Realtors will meet you either at their office, your current home, or a neutral location (Tim Hortons, Starbucks, etc) to discuss your housing needs and what services they can provide.  Once you’ve chosen a Realtor, you will sign a contract with them, which basically states that they will represent you in your search for a home.  Remember, when you are the buyer, you don’t pay the Realtor’s commission (the seller pays both the selling and buying Realtor’s fees).

Purchasing a Home
Once you’ve made an offer on a home (make sure you’re offer is conditional upon a home inspection) and it is accepted and you’ve had the home inspection completed (and it comes back to your satisfaction), you will have officially bought the home, and be under a legally binding contract.  The sellers will want you to remove any conditions (offers conditional upon a home inspection and financing are the most common) from your offer as soon as possible and you can work with your Realtor and Financial Advisor to do this.

You’ll also need a lawyer.  This is where having a Realtor is great, as they will have contacts and recommendations.  The lawyer will run a title search on your home and property (to make sure there are no leans against it) and organize the land transfer from the sellers to you.  Usually, a couple of days before the closing date, you’ll go in to the lawyer’s office to sign a ton of paperwork, so get ready to sign your life away.  Your lawyer also arranges all of the finances associated with the purchase of the home, so when you go in to sign the paperwork, you’ll take a draft or certified cheque for the amount of the down payment and the lawyer’s fees.   For first-time buyers, expect to pay up to $5000 for lawyers fees.  On the day of closing, you’ll go to your lawyer’s office to pick up the keys to your new home! How exciting!

Stay tuned for part two of this post, where I will share information about additional expenses and tips for transitioning to life as a home owner.

*Originally posted on the OACUHO blog.

financial literacy for new professionals

In honour of National Financial Literacy Month in the US, I thought I would share some tips for those just starting out in the student housing field.  Next week, I will share financial tips for those looking to make the move off-campus (yes, that world DOES exist).

As a new professional, you will no doubt be very excited about your first role.  If your new position requires you to live on-campus, you may face some unexpected expenses, so be sure to ask your supervisor for clarification.  Some incidentals may not be covered by your department, like a parking pass, so be sure to ask so you can plan ahead.  Also, make sure you find out if your apartment is furnished or not.  If not, furniture can be a major expense.  Shop around for sales, and if you are offered hand-me-downs, make use of them.  It’s better to have an older, outdated couch than no couch at all.

If living on-campus is a component of your job, find out if you will pay rent or if your accommodation is a taxable benefit.  If it is a taxable benefit, find out how much will be listed on your T4.  That number can bump you up into the next tax bracket, and you could end up owing come tax time.  If you know this in advance, you can save each month so when you get the bill it won’t be such a shock.

Credit Cards & Student Loans
Often, credit card companies will up your limit without consulting you.  Keep an eye on your statements and if you do not want the increase, call the credit card company and ask them to lower the limit.

You can call credit card companies and negotiate a better interest rate, especially if you are a client in good standing (always pays at least the minimum payment on time, etc).

If you have a student loan from a bank, once you graduate, the line of credit is no longer revolving (meaning that the loan is technically closed and you no longer have access to the “unused” or paid-back portion of the loan).  Talk to your bank about opening a regular line of credit (LOC) and transferring your student LOC to the new LOC if you are interested in being able to access the “unused” portion of the LOC.  Usually a LOC will have a lower interest rate than a credit card and can be a good alternative.  Note, not all banks will allow a student LOC to be transferred to a regular LOC.  Also, student LOCs tend to have a lower interest rate than a regular LOC.

Make sure you update your mailing address information with your bank to ensure you receive your monthly statements.  Or opt for e-bills if your bank offers them – it’s environmentally friendly and regardless if you move, as long as you have access to your email, you’ll always receive your bills on time.  Just make sure to use an email that you won’t change!

Budget & Set Goals
It will be really exciting to get your first full time paycheck, but be smart about how you spend it.  Be pro-active and develop a budget.  Know how much your fixed expenses are (the amounts that are the same every month – car payment, student loan payment, rent, etc.) and anticipate your variable expenses (the amounts that fluctuate each month – groceries, gas, entertainment, etc.).  Set aside an amount that is realistic for savings every month, and add that to your fixed expenses, so you learn not to miss that money.  Some people call this “paying yourself first” and it is truly a good habit to get into.  You’ll be amazed at how much even $100 a month turns into! Be realistic with your budget and don’t deprive yourself.  Make sure to include an “entertainment” line in your budget, to include small luxuries like going to see a movie, going to dinner with friends, etc.

Along with your budget, set financial goals.  Think about the near future (next 3 years) and more distant future (beyond 3 years) and what you want to accomplish.  Do you want to buy a car? Go on vacation? Purchase new furniture? Save for a down-payment on a house?  Determine how much that will cost and work backwards.  For instance, if you know you want to purchase a home in 5 years, and have a $25,000 down payment, you know that you need to save $5000 a year.  Break it down even further…$5000 a year works out to a little over $400 a month.  Can you afford that?  If so, add that to the fixed expenses portion of your budget.  If not, take a look at your goal.  Maybe a $20,000 down payment in 5 years is more realistic.  Do whatever works for you.

Setting, and sticking to, a budget will help put you on the road to financial freedom.  Good luck, and welcome to the field!

What financial tips do you have for new professionals? Share them below!

*Originally posted on the OACUHO blog.

do conferences still count as professional development?

Late last night, Joe Ginese dropped a bit of a bomb.  He tweeted out a new blog post entitled All About Development.  You should read it if you haven’t yet.  Joe centres his thoughts around one main idea: “We do conferences wrong and have been for years.”

If you’ve attended a large national conference, or even a smaller regional conference, I am sure that you can relate to some of the concerns that Joe raises.  I know I can.  I’ve attended disappointing sessions (session content did not live up to its description), felt disconnected with vendors (mainly because many of them don’t ship to, or service, Canada), and recycled ideas (although, I don’t think this is a bad thing – more about that below).  I agree with Joe, that the connections and conversations with others are often more valuable than the sessions.  However, I don’t think that they need to be mutually exclusive.  Let me unpack this a little more.

When I attend a conference session, I try to find something to connect to, even if the content is light years away from the program description.  Attending national conferences in the US, I usually have to “translate” the information to Canadian (FERPA = FIPPA, 401K  = RRSP, college = university & community college = college, etc.)  so I tend to always be thinking about the content.  Luckily for me, this can often provide a starting point to converse with the presenter(s) after the session.   Even if the terminology translates beautifully, there always seems to be something I can connect with, and talk about with the presenter(s) afterwards.  This had led to some fantastic conversations and connections that have transcended the confines of the conference schedule.

If I feel that a certain idea or program would really benefit the staff and students on my own campus, I make a point to talk to the presenter(s) in more detail.  It’s usually impossible for someone to reveal everything about their program/initiative during a conference session, so finding a time to follow-up (either during or after the conference) is a great idea.   Most, if not all, presenters are more than willing to chat further with you about their topic, otherwise, why would they have presented it in the first place?  So, instead of just taking the information and running out of the room, connect with the presenter(s).  Make it more meaningful.

To me, conferences are so much more than just program sessions.  You have the opportunity to connect with colleagues at task force or committee meetings, attend tweetups and receptions, engage in “extra-curricular” activities like case study competitions and early morning fitness events.  If you go to a conference and only attend program sessions, then you will be missing out.  Like anything, you get out of a conference what you put into it.

As for funding, Mallory Bower tweeted a thought-provoking question/statement earlier today as part of this whole discussion: “Wondering how many would still attend conferences if their employers didn’t pay the bill…”
I think this is a fantastic question and one that we must consider.  Professional development funds are finite (non-existent even on many campuses), so they need to be handled with care.  If you did have to pay your own way, would you still attend?  Would you get more out of it because the money is coming out of your own pocket? Would you be more willing to attend early morning sessions or volunteer for a committee?  Or would you feel less guilty if you skipped a session to do something else?  Your answers to these questions should be a good indication of whether or not you should attend a conference (or partake in any PD opportunity for that matter).

So, do conferences still count as professional development, and are they good value for money?  That depends on you.  Before you partake in any developmental opportunity, you need to decide what you want to get out of it.  I really like what Becca did for the Women’s Leadership Institute.  Read about it here.

Development without purpose can be wasteful and expensive.  Having a professional development plan is key, so you can map out what opportunities you want to take advantage of.  Funny enough, I’ll be presenting at the ACUHO-I Annual Conference and Exhibition related to this topic (“PD for Free: Making the Most of Limited Professional Development Budgets”).  Why yes, that is shameless self promotion 🙂

Thanks Joe, for starting such a great conversation! I’m curious to hear what others think about this.  Share your comments below, or join the google+ hangout.