MORTGAGE SOLUTIONS

Okay, so we still have to get through February – but, believe it or not, the spring housing market is just around the corner. If you were thinking about starting your house hunt in a month’s time, why not get your ducks lined up now and get a mortgage preapproval?

There are plenty of benefits to thinking a little ahead and getting a preapproval now, rather than later. For starters, fixed rates are still extremely low – you can likely find a five-year fixed rate for around 3.25%. By getting preapproved today, you can “lock in” – or attain a “rate guarantee” – for the next 120 days. If rates drop again, you’re guaranteed the lower rate.

Another benefit to a preapproval is that it saves you a ton of headaches down the road. Not only does it help you determine what your budget is, but if you do find that dream house, you can comfortably and quickly put an offer down.

Below are a few interesting real estate and home-focused articles for your enjoyement! Have a great weekend!

A house built for a hobbit

This guy took his love of Lord of the Rings a little too far, building a house fit for a hobbit.

Well, it looks like there’s good news and there’s bad news. The good news? Variable rate mortgage holders can once again rest easy with the Bank of Canada’s recent announcement to keep the overnight rate stagnant at 1%. It looks like you’ve once again dodged a rate increase. The bad news? The BoC announcement was downright depressing!

As far as a media relations approach goes, the Bank of Canada is typically rather reserved when explaining its decisions regarding interest rates. This time around, however, it used some pretty strong language regarding the state of the global economy:

-          “The outlook for the global economy has deteriorated and uncertainty has increased since the Bank released its October Monetary Policy Report”

-          “The sovereign debt crisis has intensified, conditions in international financial markets have tightened and risk aversion has risen”

-          “The recession in Europe is now expected to be deeper and longer than anticipated”

Other negative factors contributing to the bank’s decision include U.S. household debt levels, decelerating Chinese growth and lower-than-expected commodity prices. The bank’s Canadian economic outlook is also on the grim side, with a more modest pace of growth expected.

There was one nugget of optimism in the announcement, though. Thanks to the low interest rates and “very favourable financing conditions”, the bank is expecting consumer spending and housing activity to remain strong. That, combined with low variable rate mortgages, should be enough of a silver lining to make any homeowner happy.

Unlike some of the other experts on this blog, I’m no financial guru. Far from it. But as a freelance writer who has tackled the subjects of mortgages and real estate over the past few years, I’ve learned a thing or two about what I should be doing with my finances. Have I put this knowledge into action? No. But I guess that’s what New Year’s resolutions are for, right?

Below are my top financial resolutions for 2012. My goal is to outline them here, and update you on my progress throughout the year.

1. Address my family’s credit score situation.

While I don’t know for sure, I have a feeling that my husband and I don’t have the greatest credit scores. My goal is to overcome my fear, apply for the free credit reports that we’re allotted each year, see what the damage is – and actually take steps to remedy the problem.

1. Re-evaluate our household budget.

After recently having a baby, I don’t take the time to brush my hair in the morning much less re-evaluate our household spending. With my decreased income and our increased expenses, however, I’m assuming it’s quite likely that things could use a little tweaking in that arena. My goal is to come up with a new household budget, and find a way to stick to it.

1. Pay off our mortgage faster.

Being self-employed, there are months when I can barely make the bills – and others when I feel like I’m swimming in cash. My goal is to have a plan in place to put some of that extra cash towards my mortgage – as well as my taxes, our emergency fund, and maybe a vacation fund too.

1. Establish a financial plan.

I really would feel a lot better if our household had some sort of financial direction, but every call I’ve made to our bank to get the ball rolling on that front has ended poorly. My goal? To actually follow through, and find a way to get our finances – retirement savings, investments, wills, etc – figured out.

1. Get organized.

Every year, when it comes time to do my taxes, I scurry around the house, hunting for all the necessary paperwork, receipts and bills that need to be documented. Just once, I’d like to have these ducks lined up ahead of time.

Vanessa Chris is a freelance writer and communications director at Axiom Mortgage Solutions. You can reach her at vanessa@axiommortgage.ca.

There is no better way to rid your home of unwanted items than a garage sale. And there’s no better time to place those household goods on display than the sunny summer months.

If you’ve been thinking about doing just that, here are a few tips to keep in mind:

1. Get the word out. An ad in the paper and cardboard street sign are no longer the most effective means of garage sale advertising. Instead, go where the bargain hunters hang out – namely craigslist, kijiji, and Facebook marketplace. Don’t completely neglect the social media realm, however – a large portion of your garage sale clientele likely still aren’t familiar with the wonders of social media

2. Know your price – but be willing to negotiate. Make sure all your merchandise is labelled clearly with the appropriate price. Remember that the entire reason people shop at garage sales is because they want a bargain – so be prepared to haggle. For those items that may have a bit of a higher value, try posting them on eBay instead.

3. Stage! During peak garage sale season, there will likely be a few other competing sales on the same weekend as yours. To ensure you’re getting the most traffic, stage your merchandise. Put your highest valued items in the most prominent location – and make sure everything is neatly organized.

If you've been wanting to tackle a DIY home renovation project but are concerned you don't have the skillset or know-how to get the job done, why not enroll in a class?

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.

With all the recent media hype about rising interest rates, you'll be forgiven if you thought the days of record-low rates were far behind us. The truth is, while the Bank of Canada did increase the Prime rate by 0.25% in June - thus resulting in slightly higher variable rate mortgages - fixed rates are still incredibly low.

Right now, eligible mortgage candidates can still get a five-year fixed rate mortgage for 3.99%. The low rates are largely due to the uncertainty surrounding the global economy. Basically, when the stock market fluctuates frequently, investors pull their money and instead invest in bonds - believing they're the safer option. The more people that invest in bonds, the higher the demand. While this increases the price of the bond, it lowers the rate of interest that investors earn on it, thus lowering the yield (or annual rate of return). This lowers the cost to banks which, in turn, pass the savings onto mortgage customers through lower fixed rates.

Long story short, negative economic news - such as the threat of a 'double dip recession', and oil spill off the Gulf Coast - often come with a silver lining by means of lower fixed rate mortgages.