For most Canadians, their mortgage is not only their biggest asset, but also their biggest liability. Therefore, it is imperative to understand all the financial jargon associated with your mortgage in order to make the best financial decisions possible. How you finance your home as well as the home-buying process can have a major impact on your financial well-being and future, especially in an era where certain financial products are no longer being offered and new products available. This rings true especially for first-time home buyers.

Understanding the 'financial language' can help Canadians choose the best mortgage option which fits in with their financial planning strategy. In order to help those who are planning on buying a home, we have provided a list of the most common terms, along with a synopsis of their meaning.

•    Amortization: refers to the period of time that the entire mortgage is to be paid; this is calculated with the assumption of regular payments.
•    Appraisal: Whereby a qualified person makes an independent assessment of the property worth.
•    Assuming a mortgage: The taking over of a previous owner's mortgage when the property is purchased.
•    Buy down rate: The portion of the interest rate on a buyer's mortgage that is assumed when your house is bought. If the home buyer doesn’t like the interest rate on their mortgage, the seller can offer to add a percentage of it onto their existing mortgage.
•    Capped rate: Usually associated with a variable-rate mortgage, this is an interest rate that has a pre-determined ceiling.
•    Closed mortgage: This type of mortgage cannot be prepaid, renegotiated and/or refinanced prior to maturity, unless specifically stated in the mortgage terms.
•    Closing costs: These costs are not included in the purchase price of the home and must be paid on the closing date, i.e. land transfer taxes, legal fees.
•    Closing date: The date upon which the sale of the home becomes final, with the new owner assuming possession of the home and the funds are transferred to the seller.
•    Conventional mortgage: Where the borrower contributes more than 20% of the property value as a down payment.
•    Convertible mortgage: This type of mortgage can be changed from short-term to long-term.
•    Debt service ratio: This is the percentage of the borrower's income that is used for the monthly payments of the principle, interest, taxes, heating costs as well as condo fees.
•    Default: Whereby the borrower breaks the terms of the mortgage agreement by either not making the payments and/or by late payments.
•    Down payment: Usually consists of 5-20% of the home value that the purchaser pays up-front.
•    Equity: The amount that a homeowner actually owns outright; it is calculated by the difference between the market value of the home and the amount owing.
•    High ratio mortgage: Where the borrower has contributed less than 20% of the property value for the down payment.
•    Home inspection: Whereby a qualified person performs a visual inspection of the home and makes a report of the true condition of the property.
•    Home insurance: Differs from mortgage life insurance, this is used to insurance not only the actual home, but its contents.
•    Interest adjustment: This is the amount of interest due between the date the mortgage starts and the date of the first mortgage payment.
•    Land transfer tax: This tax may be applicable on a land transfer depending on the province.
•    Legal fees/disbursements: Monies spent on such services like a real estate lawyer that are associated with the buying of a home.
•    Lump sum payment: This refers to an extra payment that is made in order to reduce the mortgage amount.
•    Mortgage broker: An individual/company who does not actually lend money, but rather acts on your behalf to find a lender as well as arrange the terms of the mortgage.
•    Mortgage default insurance: Type of insurance that is required for home buyers that have contributed between 5-20% of the home value as their down payment.
•    Mortgage life insurance: This insures the mortgage and pays it off in full should the mortgage holder die. Term life insurance can be used for this purpose as well, and offers several advantages.
•    Mortgage rate: This is the percentage of interest the home buyer pays on top of the loan principal.
•    Mortgage term: This refers to the length of time that the interest rate is guaranteed for the mortgage.
•    MLS listings: Computer websites/lists available to consumers that show listings of available homes within your region.
•    Offer to purchase/conditional offer: The written contract containing any stipulations and/or conditions upon which the buyer agrees to purchase the home.
•    Open mortgage: This type of mortgage can be paid off, renewed, and/or refinanced at any point in the mortgage. This type of mortgage usually has a higher interest rate.
•    Porting/Portable mortgage: The transfer of an existing mortgage from one home to a new home.
•    Pre-approved mortgage certificate:approved mortgage certificate A written agreement the home buyer can obtain before buying a home stating the amount of the mortgage as well as the interest rates that the buyer is approved for.
•    Pre-paid property tax/utility adjustments: The amount owed to the seller if they have already paid these items.
•    Pre-payment: Paying part of the mortgage ahead of schedule; depending on the mortgage terms, this may incur a penalty.
•    Property survey: A survey that contains the legal description of the property; this is usually required by the mortgage lender.
•    Refinancing: This refers to the homeowner increasing the amount of their current mortgage at a new interest rate.
•    Renewal: The option of renewing the mortgage once the original term has expired.
•    Sales tax: The taxes that are applied to the purchase price of the home; this varies depending on the province as well as the type of home bought (i.e. resale property, newly built).
•    Variable rate mortgage: The interest rate on this type of mortgage varies with the market and changes every month.

Canadians home buyers should always do their own research when it comes to mortgages as well as consult with professionals. Having a deeper understanding of what is entailed in the mortgage process can enable the home buyer to make a financial choice that saves them money, as well as suits their needs. To learn more about using term life insurance to insure a mortgage, please visit our page that specifically addresses this issue.

As the Canadian population ages, awareness needs to be raised surrounding the issue of elder abuse. It is estimated that between 4 and 10% of seniors in Canada experience or will experience some form of abuse. A study conducted by the Environics for Human Resources and Social Development Canada showed some alarming statistics. Among these were included that:

•    96% of all Canadians think most abuse directed towards the elderly is either hidden or goes undetected;
•    22% of all Canadians thought that they knew a senior who was experiencing some form of abuse;
•    9 in 10 Canadians thought that elder abuse awareness should be a high priority for the Canadian government in order to help seniors live safely and protect their rights;
•    67% of all Canadians felt that women were more susceptible to abuse as a senior than older men;
•    12% of Canadians have sought information regarding a situation of elder abuse either for a specific incident or for general knowledge;
•    1 in 20 Canadians have searched the internet for information regarding issues around elder abuse.

The Government of Canada has announced their support for 16 projects across Canada under the New Horizons for Seniors Program to raise awareness around this issue. Four million dollars will be invested in Canada-wide programs to bring attention to elder abuse as well as to provide education and resources for those at risk. Some of the planned projects are:

•    The National Initiative for the Care of the Elderly plans to undertake a national project that will produce and distribute materials intended for elder abuse prevention and detection as well as intervention tools and resources for seniors, families, communities and service providers.
•    The Community Legal Information Association of Prince Edward Island plans to develop and distribute legal information and resources for seniors and their families/caregivers as well as service providers.
•    The British Columbia Association of Aboriginal Friendship Centres will develop awareness and educational materials and resources that are specifically targeted towards the Aboriginal communities to help reduce elder abuse within their population.

Elder abuse (or older adult abuse) is defined as any single or repeated acts, or lack of appropriate action that occurs in a relationship where there is an expectation of trust, which causes harm and/or distress to an older person. Financial abuse is the most common form of elder abuse, which includes frauds and scams, as well as the improper use of Power of Attorney. Neglect is the second most common form of elder abuse. Neglect occurs when the person who has custody or care for a dependent adult fails to meet the basic needs for that person. Signs that a senior may be suffering from neglect include:

•    Malnourishment, dehydration, emaciation;
•    Mentally confused;
•    Not dressed appropriately, unkempt appearance, soiled surroundings;
•    Medications not administered properly;
•    Unexplained open sores;
•    Lack of safety features in the home;
•    Being left unsupervised and/or without assistance when it’s required;
•    Not keeping scheduled doctors appointments and/or other obligations on a regular basis.

Signs that a senior may be being abused financially are:

•    Large amounts of money being taken from a bank account;
•    Suspicious signatures on cheques and/or other legal documents;
•    Unexplained debt;
•    Financial statements suddenly not being mailed to the senior's residence;
•    The senior suddenly unable to pay bills and other daily household expenses;
•    An unexpected change in a will;
•    Unexpected sale of the home;
•    Missing personal belongings, i.e. jewelry, clothing;
•    The senior being asked to sign legal papers without an explanation as to what they are signing;
•    Not remembering making financial payments, transfers;
•    Someone speaking for the senior and not allowing them to speak and/or answer questions;
•    Sudden isolation from family and/or friends;
•    Anxiety when discussing financial matters.

It is important to also be aware of any unexplained physical injuries, such as bruises, swelling, welts, lacerations, fractures, etc. While seniors can experience an increased number of falls, injuries that are consistent with being restrained will be very different, i.e. rope burns, grip marks. Emotional changes such as sudden low self esteem, agitation, sleep difficulties and unexplained fearfulness can be indications that the senior is experiencing psychological abuse.

If you suspect that a senior you know may be experiencing some form of abuse, contact a senior service in your province/territory. Seniors Canada is run by the Government of Canada and offers seniors information on a wide variety of topics. This includes finances, care facilities, health and wellness issues as well as legal matters. They also provide information for the caregivers of seniors.

Under the proposed taxation changes, Canadians can now claim a non-refundable tax credit on their 2009 tax return based on expenditures (must be eligible) incurred for labor performed and/or goods acquired for home renovations. The dates must fall between January 27, 2009 and before February 1, 2010 in respect of an eligible dwelling.  The HRTC is applicable to eligible expenditures of more then $1,000 but not more than $10,000; this will result in a maximum credit of $1350 ($10,000 - $1000) x 15%).

In order to determine if you are eligible for the HRTC consider the following factors:

•    The dwelling must qualify; any dwelling that you own and is used either by you or your family can qualify, including your home or cottage.
•    Eligibility for the credit is family based; a family will be allowed a single credit that may be shared within the whole family. If 2 or more families share the ownership of an eligible dwelling, each family will then be eligible for their own separate credit, each up to $1,350. This will be calculated on their respective eligible expenditures.
•    The expenditures incurred in relation to a renovation/alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the building.
•    Expenditures must have been incurred after January 27, 2009 and before February 1, 2010, according to agreement entered info after January 27, 2009.

An eligible dwelling must be a housing unit that is eligible to be an individual's principal residence for the individual or one or more of their family members between January 27, 2009 and February 2010. It is eligible where it is owned by the individual and ordinarily inhabited by same individual, spouse, common-law partner, and/or their children. If a portion of the home is rental property (i.e. basement), only renovations that are done to the family's personal space will be eligible for this credit. If renovations are made that are considered common areas (i.e. roof) then the expenses will be divided between personal use and income earning use.

As all expenses must be supported by receipts, so make sure to securely save these items should they be required. Documentation like agreements, invoices and/or receipts must clearly identify the type and quantity of the goods purchased, and/or the services provided. Make sure the information you intend on submitting has:

•    Information that clearly identifies the vendor as well as their business address. If they have a GST/HST registration number, make sure that is included.
•    Description of the goods and the date in which they were purchased.
•    The date of when the goods were purchased, and/or when services were performed.
•    Description of the work performed; make sure the address of the dwelling is included.
•    The amount of the invoice and proof of payment. Receipts and/or invoices must indicate paid in full or be accompanied by other proof of payment, i.e. canceled cheque, credit card statement.

Eligible expenditures include, but are not limited to:

•    Kitchen, bathroom, basement renovations;
•    New carpeting and/or hardwood flooring;
•    New additions, i.e. garage, deck, shed, fence;
•    Re-shingling of a roof;
•    New furnace, boiler, fireplace, wood stove, water heater, water softener;
•    Painting of exterior and/or interior of home;
•    Adding a new driveway or resurfacing of a previous driveway;
•    Window coverings that are directly attached to the window frame, whereby the removal would alter the nature of the dwelling;
•    Laying of new sod;
•    In ground or above ground swimming pool;
•    Fixtures such as lights, fans;
•    Cost of permits, professional services, equipment rentals.

A worksheet is provided on Revenue Canada's website, as well as more detailed information regarding this tax credit.

Starting July 1, 2010 Ontario will have a harmonized sales tax. This harmonized tax will replace the existing Provincial Sales Tax (PST) and the Goods and Services Tax (GST). Currently the GST is 5% and the PST is 8%; the combined sales tax will be 13%. While some items may not increase in price, many items that have been exempt from sales tax will no longer enjoy that exemption. The province of Ontario says that implementing a single sales tax will bring Ontario into line with what they call the most efficient form of sales taxation around the world. The finance ministry claims that this combined tax will reduce the cost of goods that Ontario exports, thus in turn making the province more competitive as well as boosting the economy.

Consumers in Ontario will have to pay tax on products that have traditionally been exempt, such as gasoline, heating fuels and electricity. Services such as haircuts, club and gym memberships and taxi fares have also been exempt in the past, but will be taxed starting in 2010. Childrens clothing, footwear, car seats/car booster seats and diapers will remain exempt from the provincial portion of the new tax, as well as feminine hygiene products and books. Basic groceries, prescription drugs, medical devices, rent and/or condo fees will remain exempt from both the GST and the PST. The purchase of resale homes will remain exempt from the PST; real estate transaction fees will be taxed however. Traveling by air and train will be more expensive as well due to the new blended tax.

The Ontario Chamber of Commerce estimates that this fully blended taxation system will cost consumers approximately 905 million dollars per year in additional sales tax. The GST and PST tax bill for companies however, is estimated to decrease by 1.6 billion dollars annually. Under the current taxation laws, business are not allowed to deduct PST from the costs of materials and other purchased products; this cost is traditionally assumed to be passed along to the consumer. The blended taxation will allow these companies to claim tax credits for these purchases, potentially saving them 3 billion dollars per year. The Canadian Federation of Independent Businesses says that this new harmonization will save businesses 100 million dollars per year in reduced 'red tape'. They will also save a further 500 million annually on the costs of administering a single tax as opposed to the 2 taxes. The Ontario Real Estate Association claims that this tax merger will add more than $2,000 to the cost of real estate transactions, which will hurt the resale home market, potentially prolonging the housing industry’s recovery from the current economic crisis.

Household expenses are predicted to rise in this new taxation system. In order to help Ontario families combat this expense, the province says it will be offering 10.6 billion dollars worth of tax relief over the next 3 years in the following manner:

•    Cash payments with a maximum of $1,000 in 2010 and 2011 for families who earn less than $160,000 per year;
•    A permanent $260 refundable sales tax credit for low and middle income adults and children;
•    An enhanced refundable property tax credit for low and middle income homeowners and tenants;
•    Exemption from the blended tax for new homes under $400,000, newly constructed homes with a worth between $400,000 and $500,000 will be eligible for a partial rebate;
•    1.1 billion dollars in personal income tax cuts.

Ontario's NDP as well as Conservative parties oppose this new taxation system. The NDP claims that the single sales tax method will leave Ontario families carrying the burden with higher household expenses, especially at a time where job losses are occurring. The Conservatives ideally are in favor with the harmonization, but say that this is the wrong time for Ontario to be raising taxes.

Legislation was proposed on March 4, 2009 that would give Ontario the legal standing to sue cigarette companies in order to recover the money spent on tobacco related illnesses in Ontario. Approximately $1.6 billion dollars is spent every year by Ontario tax-payers in relation to smoking related illnesses. The new legislation introduced by Attorney General Chris Bentley would allow the Ontario government to seek billions of dollars in damages from the 3 biggest Canadian cigarette manufacturers: Imperial Tobacco, Rothmans, Benson and Hedges, and JTI-Macdonald. British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Saskatchewan and Manitoba have all passed similar legislation. JTI-Macdonald is currently under bankruptcy protection which means Ontario has to act now or they lose their opportunity to sue this company. British Columbia has to get permission from the court to pursue this company in their claim.

The proposed legislation would allow Ontario to sue the tobacco companies for alleged wrong-doings by the companies and holding them accountable. British Columbia already has a bill that suggests the tobacco companies marketed light cigarettes as safer than the regular ones, as well as targeting their advertising towards children. It is also alleged that the companies conspired to hold back research regarding the harmful effects of smoking tobacco and undermining the health warnings that had been issued. These allegations have not been proven yet in court. Premier McGuinty has stated that Ontario is ready to sue the tobacco companies due to British Columbia's successes.

The proposed bill would give the Ontario government the right to sue the companies directly for any alleged wrong-doing as well as to allocate liability by market share and measure the health-care cost to taxpayers regarding tobacco-related illnesses. A successful lawsuit could potentially bring in a settlement as much as $60 billion dollars. The lawsuit could also bring about protective changes, i.e. no longer being able to use cartoon characters in their advertising that are targeted towards young Canadians, as well as other restrictions. A successful lawsuit would hold the companies accountable for health-care costs, which currently are estimated at $1.6 billion per year. Deaths due to tobacco related illnesses in Ontario are estimated at 13,000 per year or almost 36 deaths per day and almost 500,000 hospital days annually. The amount of money spent by the government in providing health-care for smoking related illnesses could provide funding for 8 large community hospitals or a year's funding for 2,000 MRI units.

4 U.S. states pursued the first lawsuit against tobacco companies in the mid-1990s, which ultimately led to a 50-state Master Settlement Agreement in 1999 with the tobacco industry. In this settlement, the tobacco industry agreed to pay $246 billion over a 25 year period for health-care costs incurred from use of their products. It also led to restrictions regarding advertising that was directed towards minors.

This proposed legislation follows other government initiatives to prevent Canadians from being exposed to second hand smoke. Currently in Ontario smoking is banned in all workplaces, as well as public areas such as bars and restaurants. A very recent ban made it a finable offence to smoke in a vehicle when minor passengers are present. As well, higher taxes for tobacco products are a deterrent for those who are unwilling to pay as much as $8 for one pack of cigarettes. Smokers also pay higher premiums for their health and life insurance policies, due to the increased health risk. Smokers who have quit for a year are entitled to have these premiums reassessed due to being eligible for a better health status. If you have recently quit smoking, consult with your broker to see when you can apply for a decrease in your premiums. For those who want to quit, consult websites such as the Canadian Cancer Society for help as well as support.