Monday, July 21, 2014

5 Mistakes First-Time Home Buyers Make


First-timers can be eager to jump into home ownership. But real estate experts say they see them committing the same mistakes, time and time again. Here are some of the most common ones, as identified by experts in a recent CNBC article:
1. They’re unprepared to compete against all-cash offers. Buyers need to be ready to make a quick decision if they’re housing market is heating up. Buying a home is “really like finding a job – it’s going to take a lot of time to prepare,” says Cara Pierce, a certified housing counselor with ClearPoint Credit Counseling Solutions. “That way, when the deal comes along, you’re ready to pounce on it.” Housing experts say buyers should have already saved as much as possible for a downpayment, repaired any credit report blemishes, and gotten preapproved for a loan as they start their house hunt to put them in a better position to compete.
Improve Your Relationships with First-Timers
2. They place a car ahead of the home. Lenders are going to scrutinize applicants’ debt-to-income ratio when assessing how well they can afford a mortgage payment. Consumers’ debt has gone on average from $40,000 in 2010 to $51,000 today, according to David Norris, president and COO of loanDepot, a non-bank mortgage lender. "It would be much easier to own a home if you can show a history of saving and not have gotten yourself into too much debt," Norris told CNBC.
3. They place too much emphasis on online loan information. Online sites can be good for finding out general information about loan products and estimated costs, but experts recommend visiting with mortgage lenders face-to-face to help demystify some of the process and to take into account your specific situationGo to different places and talk to loan officers to get a feel for what the differences are between similar types of loans," says Pierce. "Sometimes a company won't charge an origination fee, but then the interest rate is higher … and in some cases you can put many of the upfront costs—closing costs, title insurance—into the loan, which makes your balance larger."
4. They bank too much on online home values. Some real estate websites are giving buyers a false sense of home values, the CNBC article notes. "If a buyer believes that the actual value of the property is $1.1 million [as listed online] when it's really $1.3 million, it's a real disservice to the client,” says John Barrentine, co-founder and CEO of RED Real Estate Group. “You really should [spend time] with someone that understands the market, someone who's there day in and day out." Home buyers can get the best feel of the market by working with a real estate agent and driving around neighborhoods and get a sense of things about homes that may be less valuable or even more valuable than perceived online.
5. They forgo the home inspection. About 10 percent of homes recently purchased weren’t inspected by a home inspector, according to Bill Loden, president of the American Society of Home Inspectors. Some buyers were trying to cut down on the costs of hiring an inspector to investigate a home – which usually averages about $450 — but defects uncovered later could potentially result in the loss of thousands of dollars. "It takes a trained eye to be able to see the problems that can exist in a home," Loden said. "The inspection can also give the first-time buyer a bit of a schooling on the house and how to maintain it." Buyers should also be prepared to ask questions about conditions that are common to specific areas, such as radon in Midwest; sewers in California; and active clay soils in Dallas that can lead to foundation issues, the CNBC article notes. The home may require additional inspection from a specialist to rule out potential problems.

Fewer Canadians accelerate mortgage payments

Record-low rates have contributed to a decrease in Canadians choosing to accelerate their mortgage payments, according to a CIBC poll released Monday, though the bank suggests taking the opportunity to take advantage and pay them down quicker.

"A mortgage is the largest debt most Canadians will take on in their lifetime, and being mortgage-free is an important goal for many," Barry Gollom, vice president of secured lending and product policy for CIBC said in an official release.  "With current low interest rates, this may be an opportune time to make progress against your mortgage - even a few small changes can make a big difference in the length of time it takes to pay off your mortgage and the amount you pay in interest charges."

According to the poll – which surveyed 1,509 randomly selected participants -- 55 per cent of Canadians who currently have a mortgage are taking actions to repay them faster, down from 68 per cent in a similar poll from 2013. 23 per cent accelerated their payment frequency (down from 42 per cent); 28 per cent increased the payment amount (down from 30 per cent); 18 per cent made lump sum payments (down from 15 per cent).

The average age Canadians expect to be mortgage free ticked up on year to 58 in this year’s poll.

"With mortgage rates remaining relatively stable and at historic lows for the last few years, some Canadians may not be as focused on paying down their mortgages as when interest rates are higher," Gollom said. "Generally, paying off debt as quickly as possible is a smart decision, but you do need to ensure you're not focusing on your mortgage at the expense of your other financial plans, or by increasing debt elsewhere."

Fewer Canadians paying down their mortgages

A new CIBC poll finds there has been a significant decrease in the number of Canadians using the low interest rates to pay down their mortgages faster.  While over half of Canadians with mortgages (55 per cent) are taking one or more actions to pay their mortgages down sooner, a similar poll last year had the figure at 68 per cent. However, while the numbers increasing payment value or frequency has dropped, there is an increase in the numbers making a lump-sum repayment. The new report also says that Canadians are expecting to 58 years old before they are mortgage-free.  So, if we’re not paying down out home loans, where is any spare money going? The report has shown a large increase in spending on home renovations (up 30 per cent) and vacations (up 20 per cent). "A mortgage is the largest debt most Canadians will take on in their lifetime, and being mortgage-free is an important goal for many," says Barry Gollom, Vice President, Secured Lending and Product Policy, CIBC.  "With current low interest rates, this may be an opportune time to make progress against your mortgage - even a few small changes can make a big difference in the length of time it takes to pay off your mortgage and the amount you pay in interest charges."

Sunday, July 20, 2014

The 5 Best Ways To Prevent Depression Naturally

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We already know that getting enough sleep plays a huge role in health, from maintaining a healthy weight and staving off the common cold, to just plain keeping you sane. Well, new research is showing Read 
Believe it or not, the best antidepressants on Earth don’t come from a pill bottle. From getting more sleep to taking up a hobby, making these simple changes in your life can help boost your mood and prevent depression.
1. Get enough sleep.
There’s nothing like tossing and turning all night to put you in a bad mood, but sleep disturbances may go further than that. According to researchers, disturbances in circadian rhythms have been linked to depression, and resynchronizing circadian rhythms using melatonin supplements or light therapy may actually have antidepressant effects.
Whether you’re dealing with major depression or just looking to boost your mood, improving your sleep hygiene is an important first step. Go to bed at the same time each day, turn off the screens a bit earlier than normal, and look into light therapy if your work schedule means you don’t get much sunlight.
2. Exercise.
You’ve probably heard this before, but listen up: Exercise is incredibly valuable, not only for general health, but for its mood-boosting effects, too. You don’t need to run a marathon to reap the benefits of exercise. In a recent study, researchers had depressed patients pedal a stationary bike, measuring their subjective symptoms and cortisol (stress hormone) levels before and afterwards. They found that after just 15 minutes of exercise, both the patients’ symptoms of depression and cortisol levels were significantly reduced.
3. Regulate your blood sugar.
Have you ever eaten a sugary snack, only to find yourself starving and miserable an hour later? What goes up must come down, and a blood sugar spike followed by a crash is a one-way ticket to a lousy mood. But according to one study, sugar may have a bigger role to play in depression than originally thought. Researchers analyzed data from six countries and found a highly significant correlation between sugar consumption and depression rates.
Whether you’re battling depression or just trying to avoid the afternoon crash, balancing your blood sugar is key. Make sure to eat regular meals and snacks, including a good source of protein at every one.
4. Eat healthy fats.
Are you getting enough fish in your diet? Researchers have found that eating omega-3 polyunsaturated fatty acids (like those found in salmon, trout and sardines) reduces symptoms of depression. Flaxseeds and walnuts are also great sources of omega-3s.
5. Find passion in life.
Even if you’re eating healthy, getting enough sleep and doing your exercise, nothing will boost your mood like having a sense of purpose. According to Blue Zones, people who have a sense of purpose live up to seven years longer than those who don’t.
In a study of community-dwelling elderly people in Japan, researchers used recall reports to learn about their subjects’ lifestyles. They found that those who didn’t show symptoms of depression had a history of physical exercise, a healthy diet and the presence of hobbies throughout their lives. Finding activities you enjoy that give you a sense of purpose is a surefire way to improve your mood and reduce your risk of depression

Friday, July 18, 2014

Majority of Home Owners Planning to Renovate

Sixty-seven percent of consumers say they're planning a home renovation within the next six months, according to®'s Home Improvement Survey of more than 1,500 home owners. They're planning to spend more money on their renovations than last year, the survey found.
The most common budget range for home improvements was between $2,001 and $5,000. Eighteen percent of respondents who say they plan to renovate before the end of the year are budgeting $10,000 to $20,000 on their renovation.
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Respondents indicated that these are the most popular areas of the home to renovate: the kitchen (61%), bathrooms (59%), backyards or patios (33%), and the exterior of the home (32%).
"With 32 percent of consumers planning to spend money on improving the look and feel of their homes, home buyers should think about purchasing homes that require renovations," says Barbara O'Connor, chief marketing officer for Move Inc., the operator of "By considering these kinds of homes, buyers open themselves up to more affordable options and the ability to renovate their homes to fit their specific needs and tastes."
Here are some additional survey findings:

Most Popular Reasons for Planned Home Improvements

  • To improve the aesthetics and/or enjoyment of the home (32%)         
  • In preparation for putting house on the market (22%)             
  • Recently purchased a home needing renovations (19%)
  • To improve the value of the home (11%)

Owners' Home-Improvement Budgets for the Next Six Months

  • $2,001 - $5,000 (22%)
  • $5,001 - $10,000 (19%)
  • $10,001 - $20,000 (18%)
  • $20,001 - $50,000 (14%)

Owners' Intentions to Sell

  • Not any time in the foreseeable future (37%)
  • 0 - 6 months (20%)                                                  
  • 1 - 3 years (19%)
  • 4 - 6 years (10%)

Navigating real estate lingo

By Iris Winston
“Imagine drinking your morning coffee on the intimate deck overlooking a tree-filled yard. Enjoy the comfort of the cosy master bedroom with its compact three-piece ensuite and the convenience of the pocket-sized kitchen overlooking the open-concept family room. Take a stroll around the unspoiled lower level and visualize the future.”Reading past real estate ad euphemisms can help you narrow down your search for the home that’s right for you.
Recognize the tone? This may be an exaggeration of real-estate ad style, but not every house can be a “beautiful picture book home that radiates charm and character” or an “immaculate, executive, secluded, open-concept home.”
Reading past the euphemisms can help you narrow down your search for the home that’s right for you.
Let’s start with an analysis of the example above. For “intimate,” think “so small that you and your significant other have no choice but to touch knees when you sit.” The “tree-filled yard” raises a question. Is that your yard or the neighbour’s that you are overlooking (because the lots are so small)? And “cosy” has always been a happier version of small or cramped, while “compact” and “pocket-sized” don’t have even a passing acquaintance with spacious.
“Open-concept,” a popular term in the last few years, means no wall separates the spaces. (In this case, a wall could appear to reduce to family room to the size of a jail cell.) The “unspoiled lower level” is also frequently used these days. Translated, it says unfinished basement.
Euphemistically speaking, Realtors are required to make every dwelling seem a must-see treasure. You have to pity them as they try to sound original, enthusiastic and brief over and over again.
Realtor Joanne Beaton, who has been in the business for more than a decade, says maximizing the positive and minimizing the negative can sometimes be a challenge.
“Have you ever seen a really ugly baby and you can’t think of anything nice to say to the adoring parents?” she says. “Sometimes that happens in the real estate world, too … and because our job is to do the best for our clients and help them sell their homes, we have to highlight all the features and benefits of the home — even if they are really difficult to see.
“People also don’t realize that we are limited to the number of characters when posting an ad on the MLS (Multiple Listing Service),” she adds. “We are required to abbreviate and make every property sound so wonderful that the general public can’t help but want to see it. Sometimes, that boils down to commenting on the convenience of having a cosy kitchen where you can wash the dishes, cook the meal and feed the cat, without moving.”
Adds her husband, real estate broker Ken Beaton, who has also been in the business for more than a decade: “Part of our job is to market a property and highlight all the features and benefits. Many times, people will judge a book by the cover. In the real estate world, this could result in fewer viewings.
“We need to help people see beyond the obvious. Is the truth stretched sometimes? For sure, but we need you to view the property so that you can see the full potential.”
Ads in print or online are a major tool of the trade. Words like “beautiful” apparently improve the selling price. By contrast, pointing out that a vendor is “motivated” is likely to bring in only very low offers.
However you look at it, knowing the lingo helps to separate the wheat from the chaff in the market. A few of the stay-away words are obvious: That handyman’s special is the classic euphemism for a home needing more work than the average buyer can handle. A much more subtle approach is suggesting the property in question offers a builder the “opportunity to build a double.”
Meanwhile, if an ad trumpets that a home is close to everything, it’s likely to be on a busy corner.
At the other end of the spectrum comes the promise that there is “nothing to do but to move into this stunning home.” And the standby “executive” can usually be interpreted as pricey, with at least three bathrooms and a few fancy flourishes.
Ads that emphasize the “breathtaking park-like setting” may focus on the surroundings because the house itself has little to recommend it. And enthusiasm about a small item such as a backsplash in the kitchen (yes, this was in a recent ad) suggests that there are few larger features of interest worth mentioning.
Checking omissions is important. No comment about air conditioning or a walk-in closet in the master bedroom probably means that they don’t exist.
Less obvious are terms such as “newer” furnace, kitchen or bath. Newer than what? Presumably it’s newer than the date the house was built but not new enough to be described as a recent renovation.
Analyzing the language and noting omissions in the ads are helpful in the initial stages of any search for a home. If the Realtor’s enthusiasm for a property leaps off the page, it’s probably worth checking further. A virtual tour via the Internet is a good place to start, followed by a close look at the list of dimensions.
But, in the end, nothing replaces your own eyes on site, a check-over from a qualified home inspector and the gut reaction that sends you running out the door or deciding that this is the place you want to call home.

Decoding euphemisms

What it says: Intimate, cosy, compact or pocket-sized
What it means: It’s tiny, so you might not be able to avoid knocking knees when you sit down. Check the dimensions.
What it says: Unspoiled lower level
What it means: An unfinished basement
What it says: Executive
What it means: Spacious, but pricey. Likely to have some fancy flourishes.
What it says: Handyman’s special
What it means: Falling apart and needs a lot of work. The classic euphemism.
What it says: Opportunity to build a double
What it means: Time to demolish and start over. This could be a developer’s dream.
What it says: Close to everything
What it means: It’s likely located on a busy corner
What it says: Motivated seller
What it means: They’re anxious to unload the property, which could be a plus for buyers
What it says: Newer (furnace, roof, etc.)
What it means: Not original, but not new enough to refer to it as a recent renovation. A date would be helpful.
What it doesn’t say: Watch for what is omitted; it could be as significant as the features that are noted.

Thursday, July 17, 2014

Bank of Canada cuts forecast amid ‘serial disappointment’ with economy’s recovery

The rate of inflation is rising faster than forecasts, while the economy lags, but for now Stephen Poloz can live with that.

OTTAWA — For almost a year, the Bank of Canada has been expecting key pieces of the economy to fall into place. That hasn’t happened.
Instead of the long-anticipated rebound in exports and business investment, growth has been tepid as one forecast after another — for Canada and globally — failed to deliver as advertised.
“Right now, we do not have a sustainable growth picture in Canada,” Stephen Poloz, the central bank governor, said Wednesday in an unusually blunt assessment of the economy.
The hoped-for sustained recovery in the United States and Europe, crucial for a rotation back to this country and spurring moves into new markets, and taking the weight of growth off Canadian consumers, has yet to take hold.
“The most important thing has been the failure of exports to recover,” he told reporters in Ottawa, after delivering the bank’s latest interest rate decision — no surprise, no change — and releasing its closely watched quarterly economic outlook, which pushed back any significant improvement until “around mid-2016.”
“There’s no question that with higher global prices for energy, higher Canadian terms of trade, that’s one positive, natural force that’s working its way through our economy,” said Mr. Poloz, 58.
“Over time, we know the energy sector will get bigger and bigger, as a share. But it seems unlikely that it will be sufficient to fill all of the wedge of exports from the other sectors.”
The current economic environment in Canada is part of the “serial disappointment” that has been playing out globally, he said, and one he has witnessed since taking over from Mark Carney in June 2013.