Mortgages

Every month WalletPop searches the MLS listings for attractive homes at a reasonable cost. We've limited our picks to homes selling for less than $400K for a survey of homes that most people can afford. The average selling price was $$372,763 in February across Canada, and many of the properties we highlight are even less than that. With mortgage rates at record lows, there's no better time to go house hunting and lock in at a low rate.

Have a look and see if anything surprises you this month.

CLICK ON PHOTO TO LAUNCH A GALLERY OF HOMES FOR SALE

http://www.walletpop.ca/gallery/may-real-estate-round-up/5009301/

If you're in the market for a new house or simply looking to
renew your existing mortgage, I'm sure you've noticed the "Mortgage War" being waged by most of Canada's big banks. RBC, TD, Scotiabank and BMO have been offering long term, fixed rate mortgages for 2.99 per cent. This is among the lowest fixed rate mortgages you're likely ever to see.

On the one hand, this has been a bit of a strange move from an industry that has expressed worries in the past about mortgage debt in Canada. On the other hand, now might be a terrific opportunity for first-time buyers to get into the market. So, what should you be conscious of if you're thinking about a rock-bottom mortgage rate?

No one likes paying upfront fees for anything. After all, what's the point of paying someone who hasn't done anything for you yet? Besides, sometimes doing such a thing can actually turn into a scam. The person in question could take the fee and disappear -- never to be seen again. But there are some situations where paying upfront totally makes sense. No need to be paranoid because the following top ten covers those times when giving up your money first, translates to big rewards.

Related Links:

• Fees and Other Unavoidable Facts About Investing
• Netflix Coming to Canada, but Not in the Mail
• Mortgage Rates: How Low Should You Go?

Say you decided a bit of rest and recreation would work wonders for your mind and body. So, you book a vacation somewhere far away, as close to the Equator as possible.

You land filled with expectations. Your stay is all-inclusive. You can't stop thinking about the peaceful future that lies ahead of you.

But did you pay for the all-inclusive to include a sharp salesperson who grabs you by your lapels right there in the airport, to tell you if you buy what they're selling, you'll be getting a chance of a lifetime? Why, you'll be able to come down to that place every year, so long as you shall live, no, it's not a timeshare, it's an investment, and it's a chance of a lifetime and you would regret till death do us part if you don't sign on the dotted line?

Relaxed (the sun's so beautiful out there), filled with cheap booze (the timeshare people won't be buying you expensive cognac), impressed by the wonderful photographs (your senses have been dulled before the timeshare people opened their albums), you DO end up signing.

Then you get back home and in realize, in horror, what you did. And the first thing that comes to your mind: I want to get out of it, but people tell me it's impossible.

People don't know whereof they speak.

By Kerri-Lynn McAllister, Ratehub.ca
Special to WalletPop Canada

What do you do when you've found a great home to purchase - it meets almost every point on your checklist - but it's got that one deal breaker, a 60s style bathroom or an equally outdated kitchen?

Well, it might not be as bad as you think (the situation, not the linoleum, mind you). You could always look into an unsecured line of credit, or, better yet, roll the renovation into your mortgage. The CMHC, the leading mortgage insurance agency in Canada, will now approve up to 95% of the 'improved' value of a home provided the funds do in fact improve the value. This is known as the Purchase Plus Improvements Program (PPIP).

Every month WalletPop searches the MLS listings for attractive homes at a reasonable cost. We've limited our picks to homes selling for less than $400K for a survey of homes that most people can afford. The average home price was $360,396 in November across Canada, and many of the properties we highlight are even less than that. With mortgage rates at record lows, there's no better time to go house hunting and lock in at a low rate.

Have a look and see if anything surprises you this month.

CLICK ON PHOTO TO LAUNCH GALLERY

Canadian Press is reporting that the Bank of Canada is keeping its trendsetting policy interest rate at a super-low one per cent until at least March, which it admits will foster a continued rise in household debt from already historic highs.

The central bank's decision on interest rates Tuesday was widely expected, but it did unveil a few new twists in its release, including a slightly altered profile for economic growth and an admission its policies will likely keep Canada's housing market strong and spur consumer spending.

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We Canadians have been pretty spoiled with relatively low rates for some time. But as of yesterday, The Bank of Montreal announced it is lowering its rate on five-year fixed mortgages to 2.99 per cent, an all-time record low in Canada.

This recent announcement is likely to spur competition with our rival banks according to a recent Huffington Post article.

The question is, why should you care?

The number one question I get from home owners is the never ending, "fixed vs. variable" rate debate. And although it depends on a number of factors (your personal preference along with the accuracy of your crystal ball to predict where interest rates are headed), real estate expert Don Campbell, and president of the Real Estate Investment Network has a unique twist on the old argument.

Campbell touts opting for a variable rate mortgage, but being disciplined enough to make the payment that a five year fixed would offer thus paying more on your principal and paying off your mortgage sooner and less interest over time.

Here's the numbers he crunched based on a $300,000 mortgage over a 35 year amortization:

By Kerri-Lynn McAllister
Ratehub.ca

Suppose you don't have the funds or credit to obtain a mortgage – what are your options for home ownership? Well, with rent-to-own programs gaining popularity, home ownership may well be within your grasp.

While variations of rent-to-own schemes have taken place throughout the years between landlords and tenants, they are less common across whole condominium buildings. This changed recently when a builder in Toronto, Daniels, introduced a unique rent-to-own program for its NY Place development, with a promise of more such programs to follow with future developments.
Essentially, a rent-to-own agreement lets you secure the property you occupy as a renter for future purchase by allocating a portion of your rent to a down payment. You build your down payment over the term of the agreement and can purchase the property at the agreed upon price when the term expires.

You are also typically required to put in an initial deposit somewhere around 20% of the minimum down payment (5% of the sale price in Canada), although it may dependent on other factors as well. In return, the landlord cannot put the property for sale on the market.

So, on top of your rent, you are responsible for:

· The initial deposit; and
· An additional monthly fee that goes towards your purchase of the property and holds your agreement in good faith.

For example, at the beginning of a two-year agreement on a $300,000 home, say you put in a $3,000 deposit. Additionally, you pay an extra $500 per month, which over two years amounts to $12,000.

$3,000 + $12,000 = $15,000 that goes towards your minimum 5% down payment.

Rent-to-own agreements are best for home-seekers in the following situations: