Or at least have someone that you trust read the fine print.  This has never been more important than it is now in the mortgage industry.  You see, people are choosing their mortgage broker, and mortgage product based on marketing and advertising alone, and not doing any further research.

The old adage, “if it is too good to be true it probably is”, applies here.  You see some brokers and lenders are offering really low rates…lower than the average.  When you see this, it is a good idea to find out what the mortgage is really about.

Here are the top 3 ways, not reading the fine print can hurt you:

1)  The mortgage is completely locked in for any length of time (usually 3 years).  If you sell, you can get rid of the mortgage, but other than that, you are STUCK.  No refinance. No changes, nothing.  With this one, they really got you buy the you know what’s.

2)  No pre-payment privileges.  This could cost you over $10,000!  Even making small extra payments can save you so much money.  My clients are on payment a plan, which puts them light years ahead; however, you cannot do any of this without pre-payment privileges.

3)  Not portable or assumable.  They are features that are going to be increasingly awesome, as rates rise in the future.  Think about this.  You don’t want to live in your current place in 3 years.  Rates are now 5%.  If you mortgage is portable, than you can move to a new place, and take that mortgage with you.  If you mortgage is assumable, then it can be taken over by a qualified buyer.  Think about that…you are trying to sell your home (in 3 years), and there are 5 other homes similar to yours for sale, but instead of taking the 5% currently offered in the market, they can have your 3.09%.  Makes your home look way more attractive.

By not having these options you are leaving thousands of dollars on the table, letting the lender control everything you do, and potentially putting yourself in a really tough spot in the future…for what, so you can brag about you low rate?  I’ll take the thousands in savings, thanks!

In this recent article in the Globe and Mail:  Should young Canadians with home ownership dreams keep dreaming? It discusses that the average home in Canada will be $553,000 in 2020, and saving 5% down could be a tall test…I don’t disagree.

I really enjoy the part about budgeting.  But this might not be enough.

I think as parents, we can really set up our kids to win.  Whether it is helping pay for school, or a down payment on a home…we have the means to help them, if we start early in their lives.  Whether it is a RESP or some sort of savings…we can really help them.

What are your thoughts?  I know I have a financial planner, who’s knows it is one of my goals to assist my children this way and has made a perfect plan to achieve this.

Although not directly mortgage related, this article caught my eye. Financial Post:  IS this long-distance commute worth the expense? ,mainly because I used to have to commute. 

I used to drive from South Langley to West Vancouver.  I was in traffic anywhere from 2.5 hours to 4 hours a day.  At the time, I didn’t mind because I was starting my career, and got to work with a great mentor…so this was the distance I had to travel.  Not to mention, I had no children.  There were some moves in the meantime getting myself a bit closer, which got me down to an hour each way.  I even tried leaving a 5am and this actually shrunk the commute in the morning to 30 minutes!

However, there was always a strain on my family/personal life.  If I didn’t leave early to get home, I wasn’t home until 7 – 8pm.  If I did leave early, I got home around 5…but then was exhausted at 8pm from being up at 4:30am.

Fortunately for me, eventually I was able to move my work closer to home.  It is now 8 years later.  I work about 5 minutes from home.  I also now have two small children.  I would not trade my time with them each day for anything…especially not a commute.

Everybody’s circumstances and desires are different.  Some don’t have the choice to move their job.

How far do you commute?  Is it worth it?

As many of you know, I love to pick on the media.  Whether it is a misguided opinion, or one that is just flat out wrong.  But today, in the Financial Post, John Greenwood got it right with:  “Clearing The Fog on Housing”

And he got it right by point out something that is actually quite obvious…there is no clear direction.  You have “experts” with equal knowledge and experience stating sometimes the polar opposite opinions.  We hear things like the housing bubble is going to explode, and then the next day about the “balance” in the housing market.

I think I am just going to stick with my thoughts from the other day.  Housing is a long-term investment, something that you need to buy, and hang on to in order to see a great return.  The longer you hang on, the more you will see.   Don’t place on a minimum of 3-5 years on a property, plan on a minimum of 7-10 years.  If you can take on this approach…housing will be just fine.

This is actually a tough question.  I was reading this article in The Province:  Buying U.S. eggs costs B.C. economy $3.1 million a year: marketing board

It got me thinking.  My family has a place in Birch Bay, and we are down there almost every weekend in the summer.  We are a young family; living in some of the most expensive real estate in the country.  With expensive living costs, a struggling economy, and two kids to feed.  You have to cut costs where you can.

For us, when we started doing a majority of our grocery shopping in the States, we took our grocery bill from $800/month to $450/month.  That is HUGE!

I understand how much the BC economy needs residents to support local business, but the family first, right?

What are your thoughts?

I am always trying to bring information and tools to any one that will listen.  Things that will help them make their housing and even, money, decisions.  Sometimes they are video, often they are articles.  But this particular article caught my eye:  Globe and Mail:  Housing market correction “appears to be under way’.

Let me be the first one to thank you for stating the obvious.  This happens every time.  Most media outlets are about 6 months behind reporting and sort of real estate market information.  Whether they don’t get the stats until months later, or their sources have no clue, I am not sure.

In my opinion, in BC, there has been a slow “Cooling Off” for the last 18 months for everywhere in BC except North Shore, Vancouver and South Surrey/White Rock.  As many of us know, a lot of the demand in these markets was driven by foreign investment.  These markets, not immune to the current economic climate, have slowed to some degree now as well.  Now I know this is a generalization of our real estate market, but I think it gets my point across.

Although the new mortgage rules have had some effect, this slow down has been happening for a while.

Here is what I think you need to know.

1)  The people that needed to put less than 20% down, and now can’t qualify for anything with a 25 year amortization, is very small.

2)  If you want to refinance your property, be aware of the current value.

3)  It is all relative.  Know that if your townhouse is 10% lower in value than it was last year, so is the house you are buying too.  As always, just be careful if you are moving downsizing.

4)  Real estate is a long term investment.  When buying, plan for the long term.

Buying your first home is scary at the best of times, but with property values the way they are, mistakes have never been more costly.

Think about it, if you bought in 2007, and found out it was the wrong house, or you couldn’t really afford it…you could just flip the house, make $10,000 and no one ever got hurt.

Well, now.  This is not the case.  It is not as easy as “flipping” a home to get out of trouble.  Now you could either be stuck with a place you hate, or could cost over $20,000 to make the problem go away.

So what can you do to protect yourself?  Watch this video

So, I came across this article in the Financial Post:  Why it’s better to rent than buy so of course, it peaked my interest.

Although I don’t necessarily disagree, I was curious as to why David Kaufman thought as such and you know what, he has some great points.  I think when the majority of young Canadians, left to their own devices, will take the maximum amortization, the smallest payments, refinance every 3.4 years and never pay their mortgage down.  They will incur all of the costs of home ownership, but never really see any benefit.

But, these people also don’t set goals.  They don’t have a payment plan.  They don’t have someone advising them on debt management on a regular basis.

So although I agree with many of the things David Kaufman has said, here is another perspective.  What if you buy a home, set up a payment plan, and have your mortgage paid off in 15 years, as opposed to 25, 30…40.  Then, this is when being a home owner wins.  In 15 years, no rent payment, no mortgage payment.  MORTGAGE FREEDOM!

I guess what I am trying to say, the benefit to mortgage over rent, is that if managed properly there is an end date with a mortgage, and it can be sooner rather than later…with rent, there is never an end date.

Buying your first home can be pretty indimidating.  So many numbers, so many things to think about.  When budgeting for your home purchase often people get caught up in only finding out what their purchasing power is.  They only think about what they can afford and the monthly payments, and don’t think about the up front costs.

Well, look no further.  I have put together a video of all the costs you need to be aware of when purchasing Real Estate.  If you like it, please feel free to share it with your friends and family.

Closing Cost Video Here

Great article in The Star last week. The one point I want to really highlight is the first one “Knowing Your Long Term Goals”.  This is so important!  What is the purpose of this property?  Is it a stepping-stone, or a long-term home.  

I think another key, is making sure they are working with a professional, a serious professional, someone that is actually qualified to manage this huge debt.

Finally, I think many people lose sight, or don’t even know what to focus on when thinking about their mortgage. To me it is simple, especially for the average Canadian who’s goal is to pay down this debt as quickly as possible.  Focus on two things:

1) Are your payments comfortable?

2) Can you make your amortization smaller?

That’s it.  Be comfortable with your payments and get that mortgage paid off asap.  The sooner it is gone, the sooner those mortgage payments can be put back in your pocket.  The best way to do this…a payment plan!