MORTGAGE SOLUTIONS

Some money-saving websites...

Most people save where they can – and thanks to the wonders of the Internet, there are a lot more opportunities to do so! Below are some helpful websites that can save you a bit of cash:

Groupon

After establishing itself in the U.S., Groupon has finally made its way north of the border – to Toronto, Vancouver, Calgary and Edmonton. The way this site works is pretty straight forward: each day it features one deal offered by a local business. You get the daily deal emailed to your inbox, and you have about 24 hours to buy it. The deals are usually pretty good – think 50% off or more – and feature a variety of products and services such as personal training sessions, massages, wine making, etc.

Living Social Deals

Living Social Deals is pretty much the same as Groupon, but as of now it's only available in Toronto and Vancouver. If you live in either of those cities it would make sense to sign up for both, since they both offer different deals every day. They also make great gifts!

Beyond  the Rack

Beyond the Rack is an online website that features products from different designers – typically for a two or three-day period. Each designer has a handful of products that are drastically reduced and able to be purchased online. The products range from high-end brands – think Prada – to lesser-known designers.  

Overstock.ca

Think of Overstock as an outlet store on the Internet. The site – which features a wide variety of items, from housewares to clothing – essentially liquidates excess inventory from an array of manufacturers.

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HST confusion

It seems homebuyers in B.C. and Ontario still don't quite understand how the newly-implemented HST will affect their next home purchase.

According to a recent survey conducted by Royal LePage, 25% of real estate agents said home buyers and sellers have a low level of awareness regarding the HST and real estate transactions. Fifty percent said the HST is the main cause for the cooling housing market - while only 28.4% attributed the slow-down to a change in interest rates.

If you're in the market to buy or sell your home, you should be aware that, when it comes to the purchase price, the HST will only apply to that of a newly built home - not a resale property. That being said, many fees, services and commissions associated with closing costs will be subject to the HST.

The provincial governments in B.C. and Ontario are offering rebates that cover a portion of the HST cost on new homes. In Ontario, new homes sold for less than $400,000 will qualify for a 6% rebate. In BC, new homes under $525,000 will receive a maximum tax rebate of $26,250.

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Curb credit card spending

While credit cards are a modern convenience many of us can't do without, their easy accessibility can often facilitate overspending. If you'd like to reinvent the way you use the plastic, consider the following tips:

1)  Employ the Envelope Method.

Before there were credit and debit cards, there was cash. The envelope method involves looking at your household budget at the beginning of every month and pulling out the monthly (or biweekly) amount  of cash you will need to pay for such fluctuating costs as: groceries, entertainment, and gas. The cash is stashed in appropriately-labelled envelopes and when it's gone, it's gone! This method allows you to visually keep track of your spending, and reserve your credit for situations where it's required – like concert tickets and eBay purchases!

2) Lower your credit limit.

While you may feel flattered that your bank is increasing your credit allotment on your credit card, it's not necessarily a good thing for your finances. If you have the self discipline to not spend it all, it can help your credit rating (provided you don't use more than 50% of your allotted limit). If you don't, however, it can hurt it – especially if you spend to the point that it's difficult to make your minimum payment.

3) Cut up unnecessary cards.

Sometimes it just makes sense to open a new credit card account – if you're about to get 10% off at the Bay, for example, or if you'd like to make a non-cash purchase at Costco, which only accepts American Express. That being said, the more credit cards you have, the more tempted  you may be to rack them up. So keep your credit cards to one or two.

4)Find a low interest card.

We all know we should aim to pay off our credit card balance every month. Sometimes, however, that's just not possible. If you find yourself in situations where paying off the complete balance isn't always possible, a low interest card can save you boatloads in interest. For a list of low-interest Canadian credit cards, click here.

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Returning to frugality?

As interest rates slowly start to rise again, Canadians have started to curb their frenzied spending habits and are returning to their more natural, financially-conservative state.

It seems the bargain basement credit deals that have flooded the marketplace over the last few years were too good for many of us to resist. We were acquiring debt – namely credit card, lines of credit and mortgage debt – at a rate that was almost in pace with our credit-crazy southern neighbours.

While our debt loads are still sitting at record highs, recent indicators reveal that Canadian debt acquisition may be slowing. Genworth Financial Canada's most recent Financial Fitness survey, in particular, revealed some interesting numbers:

65% - The number of homeowners who pay off their credit card balances each month. For non-homeowners, this number is sitting at 48%.

25% - The percentage of homeowners who have made an additional mortgage payment this year – whether it's through a lump sum payment or through accelerated payments.

44% - The number of homeowners who, in the last year, were able to pay all their bills and have money left over for savings.

13% - The number of homeowners who say they're in great financial shape.

If you're a homeowner looking to trim down your debt loads, it might be worth giving us a call. Depending on your situation, we may be able to find opportunities to lower your monthly interest payments.

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Want an alternative to mutual funds? Choose a MIC.

Since the virtual collapse of the stock market back at the end of 2008, more and more individuals are looking elsewhere to store their nest egg, and ending up opting for a Mortgage Investment Corporation, or a MIC.

A MIC is similar to a mutual fund in the sense that investors pool their money to buy a variety of different assets. But instead of pooling it to buy stocks, they're buying real estate.  The funds are handled by a management company that, for a fee, chooses the real estate investments and pays out investor earnings.

The upside of a MIC is that it's a relatively safe investment vehicle to store your RRSP or other registered savings fund. While it won't get your rich overnight, it will offer you a steady return. And because it's tied to real estate – often in different markets across a province – the likelihood of property values tanking across the board is minimal.

That being said, real estate investments still go into arrears – and management companies still make poor investment choices. If you're thinking about investing in a MIC, make sure you research the management company before anything else, paying particular attention to the company's track record. Try to find a MIC that's been in existence for at least a few years and has a positive reputation.

It's also important to look beyond fancy ads or Powerpoint presentations. A slick appearance doesn't compensate for a lack of ethics. If possible, try to talk to current investors and see what their experience has been. Remember, also, that a guaranteed rate of return doesn't mean anything if the fund doesn't make any money in a given year – or if the management company is forced to pay you out of other investors' pockets.

Above anything else, remember that any type of investment vehicle carries its own form of risk. So protect yourself with the most information possible before jumping in – and don't forget to diversify!

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