Do I Qualify for a Mortgage in Waterloo Region?

Many people wonder if buying a home in Kitchener - Waterloo is really within their reach. It often seems like a daunting purchase for the first-time buyer. The good news is that with the large variety of options available today, it has never been easier to secure a mortgage.

Mortgage lenders assess a variety of criteria when considering mortgage applications. Most lenders look at the following factors when determining whether you qualify for a mortgage loan.

One of the first questions a lender will consider is how much of your total income you’ll be spending on housing. This helps the lender decide whether you can comfortably afford a house.  Mortgage payments for principal, interest, and taxes generally should not exceed 30% of your gross monthly income.

A lender will then look at your debts, which generally include house payments as well as payments on all loans, charge cards, child support, etc., that you make each month.

A history of steady employment, usually within the same job for several years, helps you to qualify. However, a short history in your current job shouldn’t prevent you from getting a loan, as long as there have been no gaps in income over the last two years.

Good credit is also very important in qualifying for a loan, and the lender will want to know that the house is worth the price you plan to pay.

Down payments are not always required, as there are mortgage programs that provide 100% financing for qualified purchasers.  If you have a down payment of 20% or more of the purchase price, this is known as a "conventional" mortgage, and the mortgage lender will not require default insurance.  However, with mortgage loan insurance to cover potential default on payments, you may be able to qualify for a mortgage with a down payment of as little as 5%.

When budgeting, also consider other monthly-related expenses such as condominium fees, heat, hydro, water, property tax, insurance, and household maintenance.

Even if you can’t buy a home right now, home ownership is possible. If you make it a serious goal and plan for it, within two years you can probably overcome most or all of the obstacles that usually face first-time buyers.

Condo Living - the advantages of downsizing in Kitchener-Waterloo

Homeowners in Waterloo Region are realizing that “living large” doesn’t always mean bigger is better. In fact there are many benefits to downsizing to a smaller home. Whether the decision is voluntarily or you are forced to move because of a job relocation or other life event, rest assured there are many benefits to decreasing your home size.

Here are a few benefits of living a “cozy life”.

1. A clutter-free lifestyle
Let’s face it, the more space you have, the more space you will fill with furniture, novelties, and clutter. Downsizing is a great opportunity to review your lifestyle and prioritize your needs. Then, you can choose to bring only what is essential and most valuable to you into your new home.

2. Smaller living means less stress
Many homeowners agree that living in a larger home can lead to greater stress and upkeep. Taking into account cleaning, home repair, furnishing, taxes, gardening, and the cost to run all of these can lead to financial and emotional stress. Downsizing can reduce the burden of daily chores and free up more time and money for leisure activities and your friends and family.

3. Saving energy is the future
One of the main disadvantages of owning a large home is the ever-increasing energy costs. Smaller homes, especially those with energy-efficient appliances and windows, give you the added benefit of reducing your carbon footprint while being budget-friendly.

4. Easier home upkeep
Who needs house help when you’ve only got 40 sqm to clean? Anyone who has lived in bigger houses like traditional bungalows knows that maintaining a fairly big home is not easy. You need more time, energy, effort, and patience. In a smaller home, you can live on a little less. Plus, you also get to save the environment by using fewer cleaning products.

5. Minimalist living
Knowing that you have limited space for non-essentials, you will think harder before making that next purchase. As a result, you save money on furniture, appliances, and decorations that you don’t actually need. Aside from this, you are also less likely to turn your lovely home into a warehouse.

6. More time for fun and travel
You will be surprised at the amount of time you will save by living in a condo. The time you save on maintenance, chores, and decorating can be converted to leisure and relaxation. The same goes with the time you save on traffic. Most condos are in the heart of the metropolis and business districts so driving and commuting to and from work is much faster.

7. Stronger family bond
Among the many benefits of moving to a condo, especially for families, are the many opportunities to bond and have fun. Picnics in the park, swimming weekends, strolling down the gardens, and walking the dog along safe community patios are priceless advantages of living in a condo. At home, you are also more likely to talk to each other and watch movies together because the small space is inevitably bringing you closer.

Living within your means and living simply are at the heart of condo living. Many people think space will be an issue, but it is an opportunity to change the way we live and ultimately make our lives better by living in a small space.

Planting for Late Summer and Early Fall in Waterloo Region

 

Planting isn't just a spring activity in Waterloo Region; fall is also a great time to plant. Turfgrass, spring-blooming bulbs, cool-season vegetables, perennials, trees, and shrubs can all be effectively planted in the fall. Autumn's cooler air temperatures are easier on both plants and gardeners. The soil is still warm, allowing roots to grow until the ground freezes.

What are good vegetables to plant in late summer?
Fall and winter gardening is only successful if you know the average date of the first killing frost in the region in which you live. Crops need to be planted early enough to let them reach full maturity before the killing frost arrives.

Several vegetables can be planted in late summer for a fall crop. For a fall crop, plant beets, carrots, Swiss chard, kohlrabi, and kale in early to mid-August, plant leaf lettuce and spinach in late August to early September, and plant radishes from mid- to late September. Due to hot, dry soil conditions, seed germination in late summer is often rather poor. To promote seed germination, plant fall vegetables when the soil is moist after a rain, sow the seeds slightly deeper than spring plantings, and lightly water the row after the seeds have been sown.

Lettuce seeds are sensitive to extreme heat. To achieve good lettuce seed germination, check the weather forecast and sow the seeds when a prolonged period of mild weather is predicted.

Extending the growing season
There are many ways to add anywhere from 10 to 15 degrees of warmth to the fall and winter garden by taking advantage of free solar energy from the sun. Many of these season-extenders offer frugal ways to get the most from your garden.

Cold Frames
Planting vegetables in a cold frame is an excellent way to lengthen the growing season. Fall and winter crops flourish in a cold frame and are protected from strong winds and cold night temperatures. Cold frames are very easy to build, and once the vegetables are planted, they require minimal care. An old window sash makes an excellent cold frame. Build a frame that is 18 inches high in the back and 12 inches high in the front and attach the window sash.

Greenhouses
Greenhouses were originally constructed for the wealthy during the Roman Empire. Today, however, there are countless options when it comes to building your own greenhouse or purchasing a do-it-yourself kit. Greenhouses extend the growing season by protecting plants from harsh weather and making great use of solar energy. Many people grow vegetables year-round with the help of a greenhouse and a heater.

Raised Beds
Raised beds are popular amongst gardeners wishing to control soil quality and extend the growing season. Soil in raised beds heats up very quickly, and the bed can be covered with a hoop that protects crops when frost is a threat.

Cool-season vegetables
Many vegetables thrive in cool weather, including broccoli, Brussels sprouts, carrots, cabbage, kale, kohlrabi, lettuce, radishes, rutabaga, spinach, and Swiss chard.

Lettuce, spinach, and other greens with a short maturity cycle can be planted later in the summer season. Extend the growing season by planting these vegetables under floating row covers or cold frames that will shield plants from frost but still allow light, air, and water to penetrate.

Trees and shrubs
Fall is an ideal time to plant trees and shrubs. The weather is cool, but the soil is still warm enough for root development. Before digging, always check with your local utility companies to locate any underground lines. Always plant trees and shrubs at their natural soil lines. Keep newly planted trees or shrubs well watered until the ground freezes so they get a good start before going into full dormancy during winter.

Spring bulbs and pansies
Fall is the best time to plant spring bulbs and pansies because the still-warm soil temperatures give their roots time to establish. By planting in fall, you'll get two seasons of enjoyment out of these cool-season favorites. Remove spent flowers so the plant doesn't use its energy to set seeds, and keep the soil moist. After the soil freezes, mulch plants to prevent alternate freezing and thawing cycles that can heave plants out of the ground.

Turfgrass
Fall is the right time to establish new turfgrass and do most lawn maintenance. If you live in the north, cool-season grasses such as bluegrass, fescue, and ryegrass should be fertilized in early September and again in late October or early November to give a boost for earlier spring green-up. In the south, avoid fertilizing dormant warm-season grasses unless they have been over-seeded with winter ryegrass.

Common Home Buying Mistakes in Kitchener, Waterloo and Cambridge

For most people, a home is the largest purchase they’ll ever make, so choosing the wrong property in Waterloo Region can have disastrous implications for your wallet and well-being. Buying a home is not an impulse buy. In most cases, you will have a few months’ notice before you actually go through with the sale. Planning ahead is critical, particularly if you don't have extensive financial resources. Whether you’re a seasoned or first-time buyer, here are a few home buying mistakes to avoid.

1. Altering your financial picture prior to closing

Do not make any major purchases or move money around until you're settled in your new home. When you make a major purchase, you limit the amount of money available for your down payment and decrease the amount of liquid capital in your name. Also, moving your money around could make it more difficult for the lender to properly document and measure your finances. So leave your money where it is until after closing.

2. Getting too attached to one property
In competitive markets, you may have to put in offers on several properties before one is accepted. Some buyers get so infatuated with one property that a rejected offer hits them hard. It’s okay to feel anxious, but you need to be able to fall in and out of love during a home search. If you find a home that you think is perfect for you and you don’t get it, you can’t stay down too long. You have to recognize that wasn’t the house for you.

3. Skipping the home inspection
Home inspections are not required when buying a house, and some sellers can rush the process and discourage an inspection. But buying a house without an inspection is extraordinarily risky because serious problems can exist with the electrical wiring, the plumbing, the roof, or the foundation. An inspector can identify problems before the closing, and you can then ask the seller to fix these problems. If you buy a house and skip the home inspection, you’re financially responsible for any problems that arise after closing.

4. Buying the wrong house
As a home buyer, the very first thing you should do is make a list of priorities and define home purchasing objectives. Figure out what features and benefits are most important and which you can live without. Before you sign on the dotted line, review this list and make sure the house you are about to purchase meets your requirements. It's easy to overlook a major factor that could come back to haunt you later.

5. Maxing out your spending power
Qualifying for a half-million-dollar mortgage does not mean you should buy a mansion; it is therefore wise to be a little more conservative. Homeowners have additional expenses such as property taxes, condo fees, and maintenance that renters do not. However, some first-time buyers fail to budget for these extra costs and assume they can afford a monthly mortgage equivalent to the rent they paid.

One buyer purchased a home that cost him about $100,000 more than he was comfortable spending. But he fell in love with the Victorian character: the high ceilings, sparkling chandeliers, and wide-open space layout. A year later, he could no longer afford to make his mortgage payments. The house was too expensive for him to maintain. He would have been better off buying a smaller home in a more modest neighborhood. But he let his soaring emotions cloud his good judgment.  Make sure you do not go beyond the budget you assigned for the home purchase.

Six Ways to Go Green in Your Garden

People have been practicing organic gardening for years, but now it's being rediscovered by a new generation of gardeners. By simply changing the way you garden, you will not only save money, but also help save the planet.

Here are a few things you can do this summer to maintain your eco-conscious garden:

Build your soil with organic matter
Your garden plants require a continuous source of nutrition. It's impossible to build up organic matter permanently in the soil because it continually decomposes and disappears, so soil building is an ongoing process.

Decaying plant wastes, such as grass clippings, leaves, and kitchen food scraps, are the building blocks of a good compost. It makes sense to set aside a small corner of your garden to serve as a compost heap. A compost bin acts as a backyard fertilizer factory by turning kitchen scraps into eco-friendly food for your garden soil. You save on expensive fertilizers, and you help the environment by keeping your garden and kitchen waste where it should be – in your soil.

Combat weeds with earth-friendly solutions
Keep weeds at bay and help the environment by laying landscape fabric, which works as a durable barrier without the use of chemicals. It also lets air, water, and nutrients into the soil and retains moisture, so you can water less often.

Mulch is another solution to help discourage weeds. A thick layer of mulch will keep light out, preventing weed seeds from germinating, and will also protect the soil, leaving weed seeds to land on the mulch rather than penetrate the soil.

Control pests with plants and wildlife
Regularly rotating the location of your vegetables can help prevent disease and pests from lingering in the soil, waiting to attack next season's crops. Space plants evenly to promote circulation and mix some pest-repelling flowers, such as marigolds, among your vegetables. This will make it harder for pests to find their plant of choice, and naturally deter them with their scent and colour.

Invite wildlife into your backyard to keep pests away. A birdbath will attract birds that will feast on insects, keeping them from attacking your plants, while a pond can lure toads and lizards into your yard, where they too will feed on pests. Eco-friendly pest controls are another option, but if you have a vegetable garden, make sure these products are safe to use on edibles.

Grow your own veggies
Growing your own vegetables is both fun and rewarding. All you really need to get started is some decent soil and a few plants. You should be able to grow enough veggies for a family of four on about 2m² or 3m². Vegetables are marginally more complicated than herbs in that you might actually have to harvest the vegetables now and again, but the thrill and satisfaction of eating produce that you grew yourself is immeasurable. Start easy, with a lemon tree, some cherry tomatoes and maybe a few runner beans, and you’ll be a vegetable gardener in no time.

Only water when your plants really need it
There really is no reason to set timers to water your plants regularly, rain or shine.  Water your plants only when needed. Water early in the day so you can avoid evaporation and winds. The best place to water plants is directly on thirsty roots. Spot watering the soil around your plants with a watering can or hose can also help conserve water.

Life Insurance or Mortgage Insurance? Which One is Better For You?

When buying a home or renewing a mortgage, many people think they are obligated to sign up for their financial institution's mortgage life insurance. Don't rush into buying your bank's insurance policy until you've looked at all the possibilities. You could end up saving money and getting added life insurance coverage at the same time by purchasing a term life insurance policy instead.

What is mortgage life insurance?
Mortgage life insurance, also known as mortgage insurance or creditor insurance, is offered by most banks and lending institutions. It is a life insurance policy that pays the balance of your mortgage to the lending institution if a person listed on the mortgage passes away.

How does term life insurance cover your mortgage?
When you purchase a term life insurance policy, you take into account all the money your family will need in case you are not around to help out. This includes your mortgage payments.

Mortgage life insurance vs. term life insurance
Life insurance gives you more options and greater control over your mortgage protection. Compare these advantages to what happens when your mortgage lender insures your mortgage:

Mortgage insurance	Life insurance
Your insurance covers only your mortgage balance.	You can choose from different types of insurance (i.e., term or permanent) with a death benefit to cover more than just your mortgage.
Even though your mortgage debt reduces over time, your premiums remain level.	Your coverage amount does not decrease over time unless you choose to change it.
If you die, only the outstanding balance on your mortgage is paid off.	If you die, the death benefit is paid to your beneficiary who can use it as they see fit, not just to pay off your mortgage.
The mortgage lender is automatically the beneficiary.	You name the beneficiary.
If you take your mortgage to another company, you may lose your existing mortgage insurance and may be required to re-qualify for new mortgage insurance.	If you take your mortgage to another company, you keep your existing insurance, so you don't have to re-qualify.
You lose all your coverage when your mortgage is repaid, assumed or in default.	As long as premiums are paid, your coverage remains in place, even if your mortgage is repaid, assumed or in default.
You have no flexibility to change your coverage as your needs change.	If you decide you need coverage only until your mortgage is repaid but later realize you require coverage for other needs, you can convert your insurance to a permanent plan.

Extra coverage with term life insurance
A term life insurance policy gives you added coverage and flexibility over a mortgage life insurance policy;

• One major disadvantage of insurance purchased through the bank is the ownership of the policy. The bank owns “your” policy and has complete control over it. The bank also happens to be the beneficiary of your life insurance policy. That means you have no say in who gets the death benefit or what the death benefit is used for. When you die, the bank is going to use the proceeds to pay off the mortgage.

  However, with term life insurance, your family receives any payout from your term life policy directly. It may be more advantageous for your surviving spouse or children to use the proceeds to invest and simply continue to pay the monthly mortgage payments. This would be most appropriate if the current mortgage interest rate is much lower than current investment rates of return available. They could simply invest the proceeds and use the investment income to pay part or all of the mortgage payments on a monthly basis.

• Mortgage insurance policies only cover you for the amount of your mortgage you owe to the bank. As you pay down your mortgage, your coverage amount decreases with it. This is called a reducing balance. With a term life insurance policy, you have a constant level of coverage for the whole term and are getting better value for your monthly payments.

• With mortgage life insurance, you have to reapply any time you switch lending institutions. But with term life insurance, unless you want to increase your coverage or terminate your plan, your policy is automatically renewed up to age 80 with no medical questions asked.

Shop, compare and save
Depending on your age and health, the premiums on mortgage life insurance can be much higher than what you would pay for a term life insurance policy. Take the time to shop around for life insurance. Compare the cost of a term life insurance policy to a mortgage insurance policy. Chances are you'll find a term life insurance policy will have lower yearly premiums and offer more coverage and flexibility than a mortgage insurance policy.

While getting mortgage insurance through your lender is convenient, a term life insurance policy might be the way to go if you're looking to save money.

How to Deal With Home Inspection Issues

Home inspection is a critical component of the home buying process. It is also one of the most common conditions made with buying offers. It is not unusual for a home inspection to identify one or more issues in the inspector's report. The inspector might find a leak in the roof or a broken window that needs replacing.

How do you deal with these issues? Should you pass on a property that you otherwise like?

First of all, you should be clear on the realities of selling or buying a home. No home is perfect, and an honest inspector is very likely to find issues. This is normal.

Just because the home inspector discovered a deficiency doesn’t necessarily mean you shouldn’t purchase the home. Many issues that arise after a home inspection are not deal breakers. However, you should bring the issue up with the seller.  Your REALTOR® will do that on your behalf and look after your interests.

In many circumstances, your agent will be able to negotiate an agreement that is satisfactory to everyone involved. This will usually be in the form of a reduction in the sale price to cover some or all of the costs of the repair, or a requirement to have the seller get the repairs done before you move in.

Otherwise, if major problems are discovered that should be fixed, then this is a different story and may be the reason why you decide not to purchase a home.

So, what are the deal breakers of a home inspection? That depends entirely on you. What is and is not a deal breaker depends on each person's preferences and needs. For example, an inspection that identifies damaged floor joists might be a deciding factor for one person who feels the problem is too expensive or time-consuming to fix.

However, the same trouble with joists might be absolutely acceptable for another client who has resources to fix the issue. A home inspector does not tell a customer whether or not to buy a house. Rather, it's his or her job to provide all the available information so that home buyers (or sellers) can make the right decision for them.

How you handle the negotiations that follow can make a big difference in how much you give on your end and the level of stress you experience from the process. You may decide that the repairs are beyond your tolerance for renovations, and you may choose to walk away from the transaction.

While finding unexpected issues with your otherwise “dream home” may be upsetting, the home inspection information will go a long way in helping you make an informed buying decision. Chances are you can still get the home and have any issues dealt with to your satisfaction.

 

Situations Where Debt is Good

Being debt free is the ultimate financial goal for most people. There are many articles advising us how to get out of debt, that we may automatically assume that debt is a bad thing. However, not all borrowing is bad.

There are many occasions when debt can actually be a good thing, here are a few examples.

1. Buying a home
Many people cannot afford to buy a house without borrowing.  A mortgage is a big debt, but it is a better financial proposition than renting. Getting a mortgage is like having an investment for the future. It offers the prospective of living debt free in 25-30 years. Furthermore, because it is secured against the value of your house, the interest rate is likely to be relatively low.

Carefully consider how much you can afford to put down and how much of a loan you can carry. The more you put down, the less you'll owe and the less you'll pay in interest over time.

2. Student loans
It is unfortunate that taking a student loan is almost an essential aspect of going to University or College, however, the gain is a good long term investment. A good degree or diploma creates the potential for higher earning power and this extra income is greater than the debt incurred.

It is unwise to borrow against your home to cover for your children’s tuition. If you run into financial difficulties down the road, you may risk losing your home. Your best bet is to save what you can for your kids' educations without compromising your own financial health. Then let your kids borrow what you can't provide, especially if they are eligible for a government-backed student loans. Such loans have guaranteed low rates; no interest payments are due until after graduation; and interest paid is tax-deductible under certain circumstances.
 
3. Building your credit history
Borrowing through loans or credit cards helps you build your credit history. However, in such cases, you should arrange to pay the credit card balance on monthly basis and avoid paying high interest on the purchasers made on your credit card.

4. Loans for investments
Some of your debt might be considered an investment. If you took on the debt to purchase something that will increase in value and can contribute to your overall financial health, then it’s very possible that debt is a good one.

Avoiding debt at any cost is not wise if it means depleting your cash reserves for emergencies. If the debt is used to purchase an asset, make sure that the utility or financial return from the asset is higher than the cost of debt. It is also important to ensure that you are not overleveraged where your borrowings exceed your assets or where you have trouble servicing the loans. Any debt which is taken after you are overleveraged is not advisable, regardless of its purpose.
 

Condominium or House: Which is Right for You?

For some people, a condominium lifestyle is the only way to live—no lawn maintenance, access to a pool and tennis court, and extra security features you might not have in a single-family home. Other people simply can’t breathe in a condo because their neighbours are too close for comfort. Consider the pros and cons and your specific needs and desires before deciding on whether to buy a condo or a house.

Because of all of the advantages of home ownership in comparison to renting, many of you will soon be reaching a point where you want to buy a home. However, you may not be sure whether you should actually buy a house or if you should look into buying a condo instead. This is especially true for younger home buyers who might want the benefits of living in a more communal situation that a condo environment provides.

Should you join the condo club or go for a more traditional home ownership?

A condo is probably the right choice for you if:

• You don’t have a lot of money to spend but still want to invest in home ownership.
• You are interested in being part of a small community living in the same complex.
• You are comfortable living in close proximity to your neighbours.
• You are a single individual or a couple that is looking for a small home rather than a large property.
• You don’t mind having certain aspects of your home ownership regulated by a committee (a home owner’s association made up of some of the tenants who own in the condos).
• You live in an urban area where condos are common (such as Toronto or Vancouver).
• You run a busy lifestyle and prefer to enjoy amenities like a pool or a shaded grounds area but aren’t able to maintain such amenities yourself either because of the time that it takes or the cost.

A house is more likely to be a better choice for you if:

• You have (or plan to have) a large family.
• You are a very private person who does not like living close to your neighbours, or having your home choices regulated by an association.
• You are investing in home ownership primarily for the purpose of resale of the home in the future (since property values are usually higher than condo values).
• You are seeking to purchase a large home and/or you need outdoor areas for things like large pets.
• You enjoy maintaining your own yard or garden.
• You live in a rural area or in a location where there are not many condos on the market.

Although there are always exceptions, condo purchases are usually best for single individuals who have neither the money to invest in a house nor the time to maintain the upkeep of a house. These tend to be young people who don’t mind apartment-style living in close quarters with their neighbours, who are comfortable having some regulation by the home owner’s association and who enjoy sharing common areas with others. Often, condo buyers are first time home buyers. If, in contrast, you are an older adult who has (or may soon have) a family and would like the freedom and privacy of a home with its own property, then a house is probably the right choice for you.

Regardless of whether you buy a house or a condo, it's important to do your homework and consider the future of the neighbourhood you're buying into. The old saying of "location, location, location" remains true for both. Each is a significant investment, and you need to find a safe and vibrant neighbourhood capable of nurturing your investment into the future.

Six Pricing Tricks To Sell Your Home Faster

When you decide to sell your home, setting your asking price is one of the most important decisions you will ever make. Depending on how a buyer is made aware of your home, price is often the first thing he or she will look at. Many homes are discarded by prospective buyers as not being in the appropriate price range before they even have a chance of a showing.

Your asking price is often your home's "first impression", and if you want to receive the most money you can for your home, it's imperative that you make a good first impression.

Setting the asking price of your property is as much about knowing how buyers think as it is about how much the property is worth.

1. Price it right
In order to set the right price, check out your competition first. A little real-estate research can be handy. Take a look at homes sold in your neighbourhood. Ask yourself: what are they selling for? How long have they been on the market? Study the supply and demand within your neighbourhood to consider whether to price your home above or below the market value.

Pricing your home lower than your competitors can essentially generate more offers, thereby driving the price higher. On the other hand, price it too high and you risk buyers going into “sticker shock”.

2. The missing penny trick
To grab the attention of potential buyers, Take a pricing tip from discount retailers like Wal-Mart. Take, for example, $19.99 vs. $20.00. While it is only a penny difference between the two, the $19.99 price seems like a better deal! Why? Because when people see a price, they make judgements in a fraction of a second whether it is a good or bad deal. And, since we read from left to right, the first number receives the most focus. Therefore, a home listing for $199,999 will generate more attention then $200,000 because people will perceive $199,999 to be a better deal. Retailers have been using this proven strategy for a long time; make it work for you.

3. Raise the reference point
You can raise people’s reference point by asking for a higher price. People use that information in setting their reference price. In addition, you can affect the reference price of buyers by telling them the price of competing properties in the neighbourhood. However, pass along this information only if the comparisons are in your favour.

On the other hand, if you set a price that is implausibly higher, the impact will be less than if you set a price that's more reasonable.

4. Send the right message
People associate precise numbers with bargains. If a house should sell for around $300,000, then offering a round number like $295,000 will convey quality and willingness to negotiate, and choosing a higher but precise number like $295,485 would indicate a bargain.

A precise number may also signal that you have given careful consideration to the price and you aren't inclined to negotiate, however, you may want to use this trick with caution.

5. Setting the asking price.
If your home is in a new development and you want to give the impression of prestige, go for a nicely rounded (up) price. But if you're going for a quick sale and you want to give the impression of a bargain, go for a precise number.

6. Make the price cuts easy-to-understand
We perceive easily computable discounts as better than larger discounts. A discount from $395,485 to $385,485 might seem better than from $395,485 to $378,495.

When a home has been on the market too long and very few offers have been made, the logical option is to reduce the asking price. But by how much? The trick here is to reduce the price by a nice, easy-to-calculate number so buyers can easily calculate their savings.

The longer your house sits on the market, the less cash it commands. Use these expert tricks to sell your house fast and maximize your profit.

How to Deal With Mortgage Payment Difficulties

When unforeseen financial circumstances impact your ability to make regular mortgage payments, you need to take quick action. With early intervention, cooperation, and a well-executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.

If you or your spouse has lost employment and no longer makes as much money, and you see that meeting your mortgage payment obligations is going to be problematic, the first step is to take a deep breath. There are literally millions of people who face the same problem. Fortunately, there are ways to avoid default and keep your home, so read on for more information on how to avoid a mortgage default.

1- Get moving on a solution. Your first option is to find a way to make up the back payments and continue fighting to make your payment on time every month. Although not an attractive option, it is an option.

Explore options to decrease expenses and increase income, such as an additional job, selling possessions, and looking to community resources for help. You may have to temporarily cut back on things like dining out, internet, and cable.

If you have a basement or spare room, you may consider renting it out. The extra income could be up to 50% of your mortgage payment.

2- Work with your lender. Contact your mortgage lender. Banks do not want to foreclose on properties. The process is long and costly, and in the end, mortgage lenders lose money. Instead, they would rather work alongside borrowers who are slightly behind on payments and come up with a practical solution.

Consider extending your mortgage term to reduce your monthly payments. The downside is that you will end up paying more in the long term. However, if it means you are able to continue meeting the minimum mortgage payments, it is worth doing.

Set up a repayment plan. If you are unable to pay your mortgage payment for one or more months, the lender may agree to a repayment plan. The mortgage lender adds additional money to each subsequent mortgage payment until the loan is up-to-date.

Your lender may also suggest an Interest-Only Mortgage. This will also reduce your monthly mortgage payments, often quite substantially. However, again the disadvantage is that, in the long term, you will need to find an alternative investment plan to pay off your mortgage capital, which might be a good short-term option.

3. Refinance your mortgage. 
This is perhaps the easiest and most effective method. If you happen to be on your bank’s existing standard rate, the chances are you will be able to find a much better deal.

4. Talk to a Financial Advisor. 
If the situation is becoming overwhelming and you are really in danger of defaulting, you may need to consider speaking to a financial consultant or accountant. This will arm you with expertise and resources with which to approach planning your financial future and make the most of your current circumstances.

5. Resell – Downsize. 
This option is probably the most drastic and is to be undertaken only when the others have failed. If you can sell your house, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

If you can see that things are going to get bad in relation to meeting your mortgage payment obligations, take a deep breath and take action now—it will help in the long run.

 

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Buying New Construction vs. Older Homes

When deciding whether to buy an older home or a newly constructed one, many questions come to mind. Start by educating yourself and knowing the pros and cons of each.

In most cases, existing homes have a touch of character with their own charm and details.  They are usually located in more established neighbourhoods with mature trees and desirable landscaping, and may be closer to city services such as schools, libraries, hospitals, shopping centres and public transportation.

Older homes may have better quality materials and workmanship that are too costly for newer homes, and may come with window coverings and appliances which are often included with the home. If you are lucky, you may still get an updated kitchen and bathrooms if the home has been renovated.

However, existing homes are generally less energy efficient and are typically more costly to heat and cool. They may need updating and require expensive repairs, and sometimes it may be difficult to find or match older building materials.

Newer homes usually have bigger rooms, more built-in wardrobes and closets, and more bathrooms. If you are building a new home, you can also influence the layout and the finishes within the home as part of the negotiations with the builder or developer.

Whereas with an existing home, you will inherit what the previous owner built or remodelled over time. Very rarely will an existing home be built and finished exactly to your liking. Think about how much renovating you'll need to do to an existing home. If you can buy an existing home that's been totally renovated in a great neighbourhood within a good school district, this might be a better choice than moving into a newer neighbourhood with an unestablished school district.

On the other side, buying a newly-built home tends to cost more than an existing home, unless you buy outside of the city, where land is cheaper. Of course, you will have to consider the price of gas to get to your job.

And it isn't just about getting to your job. You'll also want to think about how long it will take to get to a grocery store, dry cleaners, your kids' school, your house of worship and other places you get to by car.

While new homes are more expensive, they might also increase in value faster than an existing home. That said, it may be challenging to buy a new home in your neighbourhood of choice, unless you buy a vacant lot, hire a developer and build your own home, which can get quite costly.

However, with new homes, you get warranties and guarantees on appliances that come with the new home. Dangerous building materials, such as lead and asbestos, will likely not be a problem. A new home will meet modern safety and building codes and usually use building materials that offer improved insulation, thereby reducing your heating bill.

You may be able to upgrade or customize such features as floor coverings or paint colours, and sometimes the floor plan. New homes often have more closets and storage space, and most importantly, don't require as much maintenance.

New homes though, have their own disadvantages. Higher taxes could be required to bring water, gas or electrical services to a still under-populated area. Resale could be difficult if the entire neighbourhood is not yet complete, and you may have to cope with construction noise, dust and mud. New neighbourhoods frequently lack the relaxing appearance of mature trees, and your new subdivision may require costly landscaping.

You can make the case for and against buying either a new home or a "used" home. It's great to live in a brand new home, but there's nothing like the feel of an established neighbourhood. The bottom line is: Don't buy someone else's problems unless you can tackle the solutions.

 Find a house you like, consider its pros and cons — objectively, as well as emotionally — and think about the compromises you're willing to make. The more logically you approach buying the house, the more you're going to love living in it.