Mortgages

By Morgan Housel
Motley Fool

Mostly by accident, I have never owned a home, and consider it one of the best financial moves I've ever made.

Not because suffering through one of the worst real estate downturns in history would have slammed my finances, although that's likely true. But because in the last four years, my wife and I have lived in four different locations in three different states on each side of the country. Each move was driven by work and school opportunities that would have been out of reach had we been tied down to one home.

Our story is hardly unique. In one of the most telling studies looking at the benefits of home ownership, economists Andrew Oswald and David Blanchflower ask, "does high home-ownership impair the labor market?"

Their answer is "yes."

Greece and Cyprus are a mess and much of Europe is poised to join them. Canada's relative stability has been credited to, among others, the conservative and risk-averse nature of our five big banks -- RBC, TD Bank, CIBC, Scotiabank and BMO. Over the past five years Canadians have gained a new appreciation for our banking system and yet, there are some key things that many of us don't know -- but should -- about our big banks and how we interact with them.

Condos offer first-time buyers an affordable entry into home ownership but buying a condo isn't the same as buying a house. One major difference is that, on top of your mortgage payments, you'll be responsible for maintenance fees for the building.

And there are other things to think about. Consider these four "R's" before committing to buying a condo.

Each month WalletPop searches the MLS listings for reasonably priced, attractive homes across the country. We've limited our picks to homes selling for less than $400,000, a bit more than the national average, which clocked in at $352,800 in December 2012, up 1.6% from a year earlier. And many of the properties we highlight this month are much less than that. With low mortgage rates and a still-soft market there's no better time to go house hunting and lock in at a low rate. Click on the images below to launch the slideshow, and let us know whether you like our picks this month.

It's been a busy year for accountant Selva Perera, 45, who lives and works in Brampton, Ontario. His wife, Vasudha, 43, has had a pretty eventful year too. (We've changed their names to protect their privacy.) Six years after arriving to Canada from Sri Lanka -- via a brief stint in Abu Dhabi -- they became Canadian citizens last winter. "When we received the chance to come to Canada, we didn't hesitate," says Vasudha. This long awaited opportunity did not come without a few sacrifices.

Since immigrating to Canada, Vasudha, a trained lawyer, has had difficulties finding steady full-time work in the legal profession. This has meant that her family has endured some financial hardships on their way to achieving their Canadian dream. "It's been demoralizing as well as financially challenging," she adds.

With two children aged 11 and 16, like many parents, both Selva and Vasudha want to provide them with a secure future. In 2012, after many years of searching and praying, Vashuda finally landed a full-time job as a legal assistant at a downtown law firm.

Over the years the Pereras have toiled away and saved enough money to purchase a townhouse for their family of four. The Pereras were laser-focused on their quest of buying their first home, so much so, that they cashed in the entire value of the RESPs they had set aside for their children's post secondary education. Now that Selva and Vasudha both have reliable full-time jobs, Canadian citizenship and a home that they can call their own, they are at a loss as to what their financial priorities should be. Should they be more aggressive with saving for their children's education or should they focus more on their retirement savings?

Suicides in the UK rose significantly in 2012, according to the British Office for National Statistics, and suicide prevention experts in that country say that it's due to irresponsible lending practices by British banks and predatory debt collectors there.

The Brighton Report, released earlier this year, revealed that the number of suicides in the UK hit 6,045 in 2011, a 7.8% increase compared to 2010, with deaths among men accounting for the largest proportion. A total of 4,552 men took their own lives in 2011 compared with 1,493 women.

"Debt clients frequently feel humiliated, disconnected and entrapped, with the process of debt collection having a clear impact on people's mental health," read the report from England's University of Brighton.

The ONS says that, among men aged between 45 and 59 years old, the suicide rate increased significantly between 2007 and 2011 to 22.2 deaths per 100,000 people.

"These figures ... reveal the profound human consequences of the economic downturn, in which unemployment, debt, and the relationship breakdowns that often follow, can push people who may be already vulnerable to take their own lives," Marjorie Wallace, CEO of SANE, a UK mental health charity, told Reuters.

Real estate ads and television shows sell us the dream of home ownership every day. We see the moment when first-time home buyers walk into their perfect home. They gasp as the real estate agent dramatically reveals all the fine details: top-of-the-line appliances, polished hardwood floors and inviting fireplace.

Later, we see the happy homeowners moved in, hosting a party with friends and family in their perfect new home.

It's hard to resist the allure of purchasing your own home. But long before you measure curtains, lay down hardwood floors and open that bottle of champagne, you have to start with the numbers. Can you really afford to buy a home?

Ignore the media telling us that home prices are increasing/decreasing/becoming affordable/becoming unaffordable. If you want to buy a home, you need to look at your individual circumstances. It's time to do some calculations.

Last summer, while knee deep in her backyard vegetable garden, Lucy Nichols found herself at a crossroads. At the age of 39 she was established in her career as a high school principal and was living quite comfortably in her three-bedroom home, which she had purchased by herself four years earlier. But she felt something was missing. (We've changed her name to protect her privacy.) She began to feel her life was becoming mundane. She craved adventure yet she still felt compelled to help people.

As a single and childless woman she thought she was in a good position to take a sabbatical. Trouble is how much of a beating would a one or two-year sabbatical take on her finances? "I've been quite fortunate in life and I don't necessarily want to wait till I'm in my sixties and seventies to travel, volunteer and write that book that been on my bucket list for years," she says with a grin.

By RateSupermarket.ca

A recent consumer poll shows that when Canadians select their personal finance products, money talks. Consumers are far more likely to choose a product offering the highest return or best price, even over intuitive features that may better address their financial situation.

The findings were gathered by the Consumers' Choice poll, conducted by RateSupermarket.ca as part of their inaugural Best of Finance awards, which tested Canadian preferences toward types of financial products and resources, as well as sentiment toward recent market activity affecting consumers.