(NC) An estimated three million Canadians have one, and they have emerged as the single largest contributor to the growth of household debt in Canada.

Yet many consumers do not appear to fully understand how they work.

No, we’re not talking about credit cards or car loans. We’re talking about home equity lines of credit or HELOCs.

According to a 2019 survey by the Financial Consumer Agency of Canada, many people appear to lack awareness of the terms and conditions of this widely sold financial product, exposing them to the risk of over-borrowing, carrying debt for extended periods and uninformed decision-making.

HELOCs are a secured form of revolving credit. The lender uses your home as a guarantee that you'll pay back the money you borrow. And, as you pay your HELOC down, you can borrow it again, up to a maximum credit limit.

Most major financial institutions offer them with a mortgage as a combined product, which is sometimes called a readvanceable mortgage. Many use them for renovations, debt consolidation, vehicle purchases and day-to-day expenses.

When used responsibly, HELOCs can benefit consumers through low interest rates, convenient access to funds and flexible repayment terms.

Unfortunately, the convenient features of HELOCs can encourage consumers to add too much to their debt load.

In fact, 27 per cent of those who responded to FCAC’s survey said they make mainly interest-only payments on their HELOCs. Considering that, on average, Canadians owe about $65,000 on their HELOCs, this means many homeowners end up carrying debt for long periods.

So, if you have a home equity line of credit or are considering getting one, you need to ask yourself:

• Would a HELOC tempt you to use your home like an ATM?

• Could you still afford HELOC payments if you lose your job or interest rates go up?

• Are you prepared to stick to a plan to pay it off fully, and avoid continually borrowing against your home equity?

Those are just some of the questions to consider before borrowing money that will be secured by your home equity.

Identity theft has been on the rise so I thought I would share some information to protect yourself from identity theft.

How to Spot Identity Theft

1. Review your credit report regularly to spot suspicious account openings.

2. Check banking transactions regularly. Report anything strange immediately.

3. Recognize, and look into it, if youre not getting important pieces of mail (i.e. bills, bank statements).

4. You are receiving calls from debt collectors about debts that aren't yours.

5. You get a notice that your information was compromised at a place you do business with or have an account. 

How to Protect Yourself

1. HTTPS. Purchasing or putting your information into a website that does not have the prefix HTTPS means it is not secure. Watch out for sites that only have HTTP.

2. Secure your mail. Do not leave any trace of information on credit card statements, utility bills, and the like. This is a strategy lots of thieves use to gather information from you. Shred anything that has your name and address on it.

3. Read your credit card statements thoroughly and often.

4. DO NOT EVER give personal information such as your SIN, DOB, and banking information away without 100% knowing who you are talking to - even if they are threatening you with legal action or imprisonment. 

Here is a true story:

I recently had some clients who had their house up for sale and received an offer. They were so excited and went off to put an offer on the home of their dreams. When it came time to get their mortgage financing in place, the mortgage insurers declined the client. We couldn't understand why as they had solid employment, great credit, no debt and their own funds for the down payment from the sale of their home.

After digging a little more, we pulled their Trans Union credit bureau, which is what the insurers pulled and saw that a credit card with a limit and balance for $22,000 was outstanding for 4 months and was heading to collections. When this was discussed with the clients, they noted it was not theirs. So, I directed them to reach out to Equifax and Trans Union and do a fraud inquiry. Here is what was found out:

The credit card had been open for 14 years ago, each time, drawn down and paid in full. When this typically happens, the lender keeps increasing the limit until it reached $22,000. At this time, they had taken a cash advance for 22k and walked. The mailing address of the cardholder was Montreal Quebec. The client had never lived there. They thought this would be cleared up quickly but to their surprise, it could take up to 6 weeks so no lenders would proceed with their purchase. They had to walk away from the offer on their dream home as they couldn't get new financing till the fraud was cleared up and they also had to walk away from the sale of their home as they would be homeless.

This is just a prime example of starting your preapproval process early so that any surprises can be detected early on.

(NC) Winter is made for curling up inside to watch a good movie or tv show. And when you’re in hibernation mode, it’s nice to have a dedicated place for binge-watching. Here are some tips to create your very own theatre at home:

Minimize ambient disruptions. You don’t need to do a major remodel, but a few changes can help cut out distracting sounds and light. Try choosing a space that’s naturally darker like your basement, or you can fake it with room-darkening or blackout blinds. When it comes to eliminating noise, softer materials can make a big difference – add an area rug, throw pillows and lush curtains.  

Plan for proper viewing. For a comfortable experience, consider some rules of thumb for viewing and seating distances. The distance from your tv should be 1.5 to 2.5 times the diagonal width of the screen, and it’s best to have the centre of the screen at eye level. If you’re buying a new tv, use this formula to see how big you can go before it starts to get overwhelming.

Get the right media stand. You don’t want a multitude of cables cluttering up your home theatre, so look for a cabinet that has space for cable management. If you still have a Blu-ray or DVD player, make sure there’s space for it too. If most of your content comes via the internet, plan for your Wi-Fi router to be nearby. It’s also important that your electronics are well ventilated, as they can heat up when in use. A power strip with built-in surge protection can be a cost effective way to protect your high-tech toys.

Streamline your content. Many of us are cutting the cord nowadays, replacing traditional television with online subscription services. But if you still want to enjoy a cable-like experience, consider TiVo Edge for antenna, a live tv, DVR and streaming player that lets you easily find and watch the content you love. It integrates popular apps like Netflix and Amazon Prime Video, as well as live-to-air television, and has handy features that let you search across content partners, record shows and skip commercials. Find more information at tivo.com/ca.

(NC) One of the best things about winter is coming inside from the frigid weather to a cozy and welcoming environment. To make your home a space where you’ll want to hibernate all season long, check out these tips.

Add layers of lighting. Our winters can be long and cold, so take steps to make sure your refuge is toasty warm and inviting. Swap out cool, white lightbulbs for warm ones and place plenty of light fixtures at various heights throughout your home. Think reading lamps, wall sconces and pendant lights. If you have a fireplace, make sure it’s clean and safe to use for natural lighting and warmth. You can also pepper your home with candles in comforting seasonal scents like fresh pine or cinnamon.

Create cozy nooks. Whether it’s in your bedroom, living room or study, set up spaces that make you want to curl up for a relaxing evening. Try making a little reading nook in your bay window where you can dive into a good read while pausing to watch the snow fall. If you love board games or puzzles, set up a dedicated table on the side of your living or family room, and you can leave them out so you can return whenever you like without worrying about tidying up.

Warm up with textiles. What’s better at this time of year than snuggling up with a fluffy pillow and blanket? Down isn’t just for the bed anymore, and there are lots of stylish (and Canadian) options that are a great addition to warm up any room in your household. For the most warmth and best insulation, choose high-quality down products that keep warmth in and cold out. Look for the Downmark label, which certifies a product is Canadian made and ethically sourced, an important feature for today’s savvy consumer.