Re: Tax Free Savings Accounts (TFSA)
It has recently come to our attention that due to administrative complications between Concentra Financial (our TFSA Trustee) and Canada Revenue Agency (CRA), there may be possible inaccuracies in the Notices of Assessment that you will receive if you made a contribution to your credit union TFSA. Although this reporting issue will be corrected by approximately mid-April, we recommend that you check your updated corrections sent to you by Canada Revenue Agency in July or August to ensure that it accurately reflects your contributions and/or withdrawals. As a reminder, the 2010 TFSA Contribution Limit is $5,000.00. Your maximum 2010 TFSA Contribution Room is $5,000.00 plus unused 2009 TFSA Contribution Room plus 2009 TFSA withdrawals minus 2009 over-contributions.
Please note that these issues are isolated to reporting only and in no way affect your deposit with us! Should you have any questions regarding this notice or how you can take advantage of saving tax free, please do not hesitate to contact our office.
Your monthly statement for February 2010 will be delayed. The delay is due to shipping complications from our service provider. We apologize for the inconvinience this may have caused.
To access your statements online, please visit our website at www.teucu.com and click on cyber banker.
For more information about online banking, please contact us at 416-542-2522.
In an effort to reduce the number of frauds and skimmings that take place on ATM and Credit Cards each year, Interac has anounced that it will move towards Chip Card Technology and will be migrating from Cards with MagStripe to Cards with Chip. The migration to Chip technology is a result of the Chip itself being nearly impossible to duplicate or copy due to high levels of encryption. Many Credit Card Companies including Credit Union MasterCard are currently rolling out Credit Cards with Chip Technology already.
Some Financial Institutions are currently in the testing phase for ATM Cards with Chip technology to be rolled out later in the year, including TEUCU. Members will not notice much difference from the card experience, except the card will no longer be swiped, but inserted into the chip card reader. The benefits of the switch will include overall risk reduction, consumer protection, privacy and security.
Please remember to check back frequently for more updates on this exciting change coming our way, and when you can expect to receive your new ATM Card.
As many Canadians travel to Cuba each year, it is important to know how currency and methods of payments are accepted while you are down there. As previously mentioned in our newsletters and mailings, Credit Union MasterCard was purchased back in 2007 by MBNA, a subsidiary of Bank of America. As a result, Credit Union MasterCard will NOT be accepted as a method of payment on excusions and other items while in Cuba.
Although members have the benefit of using their ATM card to make purchases all across Canada and selected locations in the United States, we do not have the network available to approve Point of Sale transactions in Cuba. Members may still use their ATM card at ATM Locations in Cuba displaying the PLUS symbol; however, ATM machines in Cuba are scarce, and may seldomly be maintained.
Your best alternative when travelling to Cuba would be to bring enough cash with you to do everything that you will want to do. ATM machines may also be available at the Airport when you arrive in Cuba. If you have been to Cuba, and wish to share your experiences, feel free to comment below.
Remember to continue to read our blogs, newsletters and monthly mailings for important information that may affect you or your finances.
On February 16, 2010, the Federal Goverment announced changes to the underwriting process of Goverment-backed Mortgages. The 3 Primary changes that were made are as follows:
• Require that a borrower qualify at a five-year fixed mortgage rate even if he/she chooses a mortgage with a lower interest rate and shorter term. Currently, borrowers qualify at a three-year term;
• Lower the maximum amount homeowners can withdraw in refinancing their mortgages to 90% from 95% of the value of their homes; and
• Increase the maximum down payment to 20% from 5% on non-owneroccupied properties purchased for speculation.
The above changes were made in anticipation of strengthening the Mortgage industry by allowing for a cushion should property values decline, or provided interest rates begin to increase upon a rise in the economy. This means that should property values decline, Canadians won’t be left with Mortgages that are higher than the value of their home. It also means that if Canadians are approved at a higher rate, they won’t be left unexpectedly unable to meet their mortgage payment obligation.
These changes to the criteria follow changes previously set out by the Goverment back in October 2008 where they reduced the minimum downpayment from zero percent to 5 percent, reduced the maximum amount from 40 years to 35 years and established a more stringent minimum beacon score for financing in an effort to stabilize the Mortgage Industry to avoid the same fate of the United States.
What is a Goverment-backed Mortgage?
A Goverment-backed Mortgage, also called an insured Mortgage, is whereby the purchaser is buying a house with less than the standard 20% downpayment. Canadians can purchase a property with as little as 5 percent down through CMHC, an insurer. CMHC will insure the Financial Institution in the event of default, for any losses that may occur. In short, CMHC allows for Canadians to purchase a home with as little as 5 percent down, and insures the Financial Institution so that they are protected and able to approve the Mortgage funding.
How do these changes affect me?
The good news is that you can still purchase a home for principal residence with as little as 5 percent down. How it works now is that Canadians can be approved for a Mortgage based on the 3-year Mortgage rate, which right now is at an all time low. What this does is that it makes your mortgage payment lower, and more affordable. However, in 3-years time when you’re up for renewal, Mortgage rates may have doubled, making payments no longer affordable for Canadians. This new change will now have Canadians originally approved at the highest Mortgage rate, or that of a 5-year, to ensure that payments remain affordable after maturity.
Canadians looking to purchase an investment property, for the purposes of speculating that the housing market will continue to grow, they will now be required to put down a 20% downpayment. What this means is that Canadians are no longer able to purchase an investment property for purposes of speculation with only 5 percent down.
One of the biggest changes that will affect a lot of Canadian home owners is the amount that can be withdrawn from their property. Currently, Canadians can withdraw up to 95 percent of their property value for purposes of refinance. Under the new change, Canadians can only withdraw up to 90 percent. This will affect anyone looking to withdraw equity from their property to consolidate debt, home renovations, or other projects, less their existing Mortgage.
The above changes will not take effect until April 19, 2010. For anyone that would like more information on how these changes will affect them, or to talk to me about refinancing your property prior to April 19, 2010, please contact our office at 416-542-2522.
Mark Mcdonald, AMP
For members accessing their Statements and cheques through “My Statements” under no more paper statements, please be advised that the link for the page has been changed effective today. What this means is that for any members who bookmarked the previous link to their favourites for fast access to the site, will no longer be able to access the page. Please change the link in your favourites to the following: https://h43b.cu-asp.com/teucu/main.html. Alternatively, you can delete the existing bookmark, and select on “My Statements” and bookmark the new link.
Don’t forget, statements and cheques can also be accessed through estatements from your CyberBanker. Call today to be set-up with Internet Banking 416-542-2522.