How to leave your bank and start a new relationship with a credit union in 5 simple steps

notepad, pen, glasses and cup of coffee

There’s never been a better time to switch from your bank to a credit union.

From ever-rising fees, to poor service, to criticism over aggressive sales practices, Canadian banks have come under heavy scrutiny in the past year. So what stops angry and frustrated bank customers from immediately closing up their bank accounts and embarking on a new relationship – with a credit union?

At YNCU, the number #1 reason we hear is ‘it’s too much work to switch.’ And the truth is it can be complex and time consuming. On the other hand, it can be a smooth and relatively painless experience. Much depends on attitude, as well as having an organized approach.

Here are some things to consider if you’re planning to switch your bank accounts:

Chequing and savings accounts

Your first step is shopping around and deciding where you are taking your business. Before closing out your bank account, open up a personal chequing or savings account at your new financial institution.

Remember to go through several monthly statements from your existing account since they’ll have nowhere to go once you close your old account.

Here’s a handy account switching checklist courtesy of Your Neighbourhood Credit Union.

Depending on your bank, you can close a chequing or savings account at a branch by phone or online. There is usually no fee to close a chequing or savings account. BMO charges a $20 fee if the account is closed within 90 days. CIBC charges a $20 fee to close and/or transfer accounts to other financial institutions. Royal Bank’s $20 fee is waived if you close the account in person.

Credit cards

Credit cards and bank accounts are independent of each other. So you can have a credit card with one financial institution and a bank account elsewhere. Cancelling a card can be done at a branch or by phone and should be effective immediately.

There is no fee to close a credit-card account. Of course, you still have to pay the outstanding balance, fees, carry-overs and interest.

Remember that pre-authorized payments set up on the credit card will no longer be processed, so you’ll need to provide billers with your new credit-card number.

calculator and banking statements

Personal loans

You will first need to decide which new personal-loan product you want and apply for it through your new lender.

Once you’ve qualified, you’ll need to notify your current lender in person and pay the balance plus interest either by cheque or debit at the time of closing, or your new financial institution can arrange to pay out the loan for you.

Mortgages

For a conventional mortgage, it’s a good idea to wait until the mortgage term matures to avoid paying penalties. But you should start looking at mortgage rates several months before your term ends.

Plan to give yourself several months before the renewal date to pre-qualify with a new lender (you can lock in a rate 90 days in advance of the renewal date). This lead time allows the financial institution to process your mortgage application, which requires a property appraisal for a fee and proof of income and employment. The lender also needs to do paperwork to get a payout statement from your current lender indicating the mortgage balance.

Banks will charge a discount fee of several hundred dollars to transfer the mortgage title to your new lender but credit unions will sometimes cover it (try to negotiate this!).

If you decide to transfer your mortgage before the term matures, you’ll have to pay a penalty. Your mortgage document will have the formula to help you estimate the amount. But your bank will tally the exact amount.

Remember to provide the new mortgage details to your home insurer.

Investments

You can hold your registered savings wherever you want, including those that are employer-matched. In addition to simplified record-keeping (one statement and one slip at tax time), consolidating your savings means you could get a better rate on higher balances.

To transfer registered investments, such as RRSPs, RIFs and TFSAs, you’ll need to meet with your new financial institution and bring your statements. Once you settle on the appropriate investment vehicle, the adviser will fill out a transfer authorization form, which will be sent to your bank to request the transfer.

There is a transfer-out fee per transfer. Since you’re a new customer, it’s worth asking your new financial institution to cover this fee.

The transfer process takes several weeks to complete.

If you hold non-registered investments, such as GICs or term deposits, it’s advisable to wait until the maturity date to transfer them to avoid penalties.

Source: Chu, Showwei. How to Break up with Your Bank. Special to The Globe and Mail. Published Thursday, Apr. 06, 2017.

Build a Holiday Budget with our handy Budget Builder!

Build a Holiday Budget in Minutes!

According to Canadian Living Magazine, the average Canadian adult spent $766 on holiday gifts in 2015. About 27 percent spent over $800, while 23 percent spent $200 or less.

Do most Canadians stick to their budget? Yes, but…

stick-to-your-budget

Source: thechive.com

 

Our handy YNCU Holiday Budget Builder can help you quickly build a budget. Our advice? Print off a copy, fill out the first three categories, then bring it with you while shopping. Fill it out as you go so that you can stay on top of your spending. Then when January rolls around, you won’t be one of the 30% of Canadians that regrets how much they spent for Christmas!

Holiday Budget Spreadsheet

The Joy and Agony of Moving

inside new house, kitchen

So – it’s official! My wife, Melissa and I have moved into our new house – and we’re loving it. To continue on my home-buying theme, I thought it was important to talk about how we prepared ourselves for the move and share tips to alleviate some of the stresses.

I’ll start with a common-sense concept – being organized. Try as hard as you may to be ready, things are going to fall through the cracks. For us, there were a few unexpected hiccups along the way.

A month before our moving date – I contacted truck rental companies to arrange a moving truck. Melissa and I had decided that we could handle one last DIY move. Given the timing of the year (end of June); many rental companies were unable to provide us with the equipment that we needed. Thankfully, there are a number of options in the KW area. Make sure you have this arranged sooner rather than later – best advice: once you know your moving date, call for movers or equipment right away!

At that one month mark – you should also make it a priority to finalize everything with your Mortgage lender. Make sure they have all the confirmations they asked for (paystubs, ID, confirmation of down payment, purchase agreements etc.); and arrange a time to sign your documents. If possible, ask your lender to mail your copies to the new house after closing so they don’t get lost amongst your other boxes and personal effects.

About two weeks prior to our closing date, I followed-up with the lawyer to make sure we were ready to sign our paperwork. Unfortunately for us, the office we intended to use was at capacity and couldn’t help us out. We were in a bit of a panic to find a new law office – but it all worked out. My advice, contact your lawyer about a month before your closing date; do not leave this to the last minute! Your real estate lawyer must go through a series of pre-work items before you sign – the more time you can give them, the better!

The week before our move date, we started packing. This was plenty of time to get our boxes organized, labelled and arranged; it also gave us a little bit of time to purge items we no longer wanted or needed. This is key! Move only what you want to move – the extra set of golf clubs you’ve been holding onto for years are ready to find a new forever home.

If you are employing the moving services of family and friends, it’s best to be in touch with them a few days prior to the moving day. Confirm when and where they should arrive, if you need them to bring anything (ex. dollies, tie-downs, tools, blankets etc.), and give them a rough estimate of the time they are needed for. Despite my best efforts, I had two of my five helpers back out. Knowing this in advance of the actual move date really helped ease the anxiety.

On moving day, make sure you keep your necessities accessible. You’re going to want to have cash, phone chargers, coolers, food, medication, a first aid kit, disposable plates/cups and garbage bags at the ready. Melissa and I made sure that both locations and vehicles had supplies in them. This kept us from having to run out to the corner or grocery store for anything on moving day.

If you have pets – you should consider leaving them with a family member, friend or boarding them for the day. Our dog Ollie wasn’t an exception to the rule – he’s very well-behaved and always tries to be helpful, but his involvement wasn’t necessary. So, he went to stay with Grandma for the day.

dog on bed

Lastly, I would strongly recommend that you focus on keeping things simple. I did not… I had booked an appliance delivery and cable installation on the moving day. In hindsight, it just complicated things – it meant I had to work around the schedules of others more than I wanted to. Yes, it was nice to have the WiFi ready on day 1; but it really wasn’t necessary. The fridge, stove and dishwasher didn’t get hooked up until later in the week, so having them take up room was really no benefit to me. Focus on what’s important, get everything to the new location without damaging it; and keep your moving team (and yourself) comfortable, happy and safe.

Remember, Rome wasn’t built in a day – and no one expects your house to look like it belongs on the cover of a magazine while you are moving in.

 

For more information about moving and the home buying process – check out CMHC’s website: https://www.cmhc-schl.gc.ca/en/co/buho/hostst/index.cfm

 

Buying a Home: 6 things you need to do before closing the deal [Infographic]

6 important items on your home buying checklist!

Let’s face it, while buying a new home is exciting, it can also be extremely stressful. This infographic breaks down 6 important items you’ll need to check off your list before closing day.

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MortgageInfographic2

Can living on a budget improve your health? You betcha!

 

woman lifting weights with trainer

5 Ways Living On a Budget Improves Your Health

You’ll be eating less food that’s bad for you

We all know how easy it is to slip through the Tim Horton’s drive through on the way to work, grab a quick lunch at McDonalds, and/or order pizza on Friday night because we’re exhausted by the end of the week. However, these spending habits add up! Several years ago my husband and I were in the habit of ordering pizza every Friday night for our family of five. With an average bill of $40 including tip, I calculated that we were spending about $2,000 a year – on pizza! We now make our own pizza every Friday night – it not only costs less, the toppings we use make it much more nutritious. Plus, it’s delicious!

2 male hikers

Budget friendly entertainment often involves more exercise

Consider going hiking, playing tag with your kids, taking a bike ride, or going to the community pool. Budget friendly entertainment can take you outdoors to explore, walk and play, which is great for both the body and mind. It’s also a terrific way to improve your health in the process.

 

When your budget is in place and you aren’t creating more debt, you will have less stress

Financial strain is one of the biggest causes of stress in most families. Added stress can lead to health issues like:

  •  Heart disease                                                       man with hands on his head because he is stressed
  • High blood pressure
  • Asthma
  • Obesity
  • Diabetes
  • Headaches
  • Depression and anxiety
  • Gastrointestinal problems

 

When you are living on a budget, you can relieve stress by paying off debt, and staying out of debt. Creating and maintaining an emergency savings fund will also help to relieve stress.

You have more money to spend toward a gym membership or equipment 

A budget does more than just provide a blueprint for living within your means. It can also help you to save money for things that really matter to your quality of life. This could include a gym membership, personal exercise equipment, or working out with a personal trainer.

Poor spending habits hurt relationships, while good spending habits can help relationships 

Relationships are greatly impacted by a family’s financial situation. The stress of poor financial decision making can cause overwhelming stress and friction between family members. Not only does this effect relationships, it can lead to worsening physical health. Changing spending habits and decreasing debt load can alleviate stress and force couples and families to focus more on their relationships. Parents also provide a good role model to kids, because kids tend to emulate the spending habits of their parents.

 

The moral of this story? Living on a budget really can help you to improve your health. Your health is more important than owning a fancy car, designer purse or an expensive house you can’t really afford . By creating and adhering to a realistic budget , you can improve both your physical and mental health.

Need help creating a budget that you can live with? Contact your local YNCU branch to make an appointment. We have locations all over Southwestern Ontario, and now in Sault Ste. Marie and Timmins too!