Worried About Mortgage Rates Going Up? 3 Steps to Prepare Yourself Financially

Worried About Mortgage Rates Going Up? 3 Steps to Prepare Yourself FinanciallyMortgage rates have been at record lows for quite some time, making it easy for new homebuyers to finance their dream homes. But what comes down will eventually go back up, and with the world economy expected to rebound in 2016, we’re about to start seeing more expensive mortgages.

So what can you do to prepare yourself before mortgage rates start to rise? Here are three strategies that will keep you ahead of the game.

Start Saving More Money Now

If you have a variable rate mortgage, you’ve benefitted from great interest rates that this world won’t see again for quite some time. Hopefully, you’ve taken advantage of this low-interest period to save up some cash. If so, you’re going to be in a great position for when interest rates rise – and if not, you’ll want to start saving as much as you can now to ensure you can weather the storm.

It’s far easier to save money now, with interest rates low, than it will be when your mortgage payment starts to rise. So start squirreling away as much of your paycheck as you can.

Pay Down as Much of Your Principal as Possible

Another great way to prepare for the rise in interest rates is to pay down your principal amount. The total amount of interest you’ll pay goes up when rates go up, but by paying down your principal, you can take a big bite out of your debt before it has a chance to snowball. So pay down as much of your principal as you can afford – it’s easier to pay down interest on a smaller principal amount.

Switch to a Fixed Rate Mortgage

One of the best ways to take advantage of low rates and ensure you get a great deal is to switch your floating rate mortgage to a fixed rate mortgage. Locking in your low interest rate with a fixed rate mortgage means you’ll pay less interest over the term of the loan, but it also means you’ll only have a set amount of time to pay your mortgage in full. If you’re in a position to predict when you can pay back your mortgage, you’ll save a lot of money by locking in your low rate.

Mortgage rates haven’t been this low in a long time, and likely won’t be this low again for many years to come. That’s why, if you’re a homeowner, you’ll want to do everything you can to prepare for higher interest rates before they get here. Contact your trusted mortgage advisor to learn more about how to manage interest rates and make sure you have the right mortgage for your situation.

Mortgage Budgeting 101: How to Determine What You Can and Can’t Afford

Mortgage Budgeting 101: How to Determine What You Can and Can't AffordWhen taking on a new mortgage, it is important to know that you can afford to carry the debt load involved, as many people find themselves in financial trouble by spending more on real estate than they can comfortably maintain. Your mortgage budget can be calculated to determine just how much you should spend on your next mortgage.

Mortgage Rates And Today’s Market Conditions

Mortgage rates change every day, and in times of high volatility can even fluctuate more than once in a twenty-four hour period. The market reflects a number of economic variables, including relevant world news and events. Wall Street also directly affects the real estate market. By researching and watching mortgage rates closely you will be able to secure your mortgage at the best rate possible.

With so many different loan types, terms and interest can affect your monthly mortgage payment significantly. Shop around, and see which loan types will work for you. The rates available will be effected by the type of real estate you are purchasing, and your credit score.

Your Total Income

Your income helps give lenders an indicator of your ability to pay a mortgage. Your total income may include alimony, investment revenue, or other sources in addition to regular wages. Knowing this total and how it might change in the near future can help one get a sense of what is manageable.

Mortgage Expectations And Monthly Expense

Monthly expenses play a big role in your mortgage budget. Credit card debt, vehicles and other monthly commitments need to be factored in full to clearly understand your financial situation.

If you are carrying a large debt load, you may want to pay your debts down before adding more debt via a mortgage. Clearing up outstanding debts will help boost your credit score and in turn your appeal to lenders.

Expenditures that may be considered frivolous or redundant could be eating away at your mortgage budget. Try to cut out unnecessary spending to create some breathing room in your monthly budget. It is important to be more realistic when budgeting than one would be when goal setting, but it is always a good idea to ‘trim away the fat’.

The Amount You Put Down On The Debt

Another factor of affordability and eligibility will be your down payment. How much money you put as a down payment can and will affect the types of mortgage loans and interest rates accessible to you. The value of the down payment will vary depending on the type of property or investment that is being secured; higher value properties will require a larger down payment.

Real estate is a great way to invest in your future. Although some can turn a profit ‘flipping’ houses, most mortgages are long-term investments. The investment grows more beneficial over time as the principal is paid down.

By carefully considering your personal finances, you will be able to determine what you can and cannot afford. Researching the options available will build your confidence when choosing a loan. Contact your trusted mortgage professional for answers to any additional affordability questions.

Smart Ways to Use Your Tax Refund

What will you do with your income tax refundIf you are expecting a large tax refund this year, what will you do with it?

It might be tempting to spend this large windfall on shopping, eating out and other fun things.

However, a tax refund is also an opportunity to gain some financial headway and set you up in a better situation for the future.

Here are a few smart ways to use your tax refund this year:

Create an Emergency Fund

If you are currently living from paycheck to paycheck, you are treading water on the surface of your finances and any unexpected disaster can pull you under and cause you to start drowning in debt.

If your car breaks down, you lose your job, or you get ill or injured, you will need to borrow money to get your head above water again and this can take you on a downward spiral which is hard to get out of.

It is essential to have an emergency fund of at least six to eight months of savings to protect you for the unexpected situations which might arise in life.

Use your tax refund to get this savings account started and then slowly build it up more by adding a percentage from every paycheck.

Pay Off Your Credit Cards

Another very smart thing to do with your tax refund is to pay off any high interest debt which you have accumulated.

Credit card debt is draining your finances every month with high interest payments, so it should be the first debt that you pay off.

If you think about it, paying off a credit card charging interest at 18% or more is the same as buying a high-flying investment that gains at least 18% on the same amount of money.

The difference is that by paying down expensive debt, you actually are guaranteeing yourself that return on investment.

You can also contribute it towards paying down student loans, car loans and any other debt you might have.

Make Home Improvements

If you already have an emergency fund and you have paid off your credit cards, spending your tax refund on home improvements can also be a smart way to invest the money.

Renovations can help to increase the value of your property when you eventually resell it, especially when you upgrade the most important rooms such as the kitchen and the bathroom.

Also, green renovations such as adding sealed windows or energy-efficient appliances can save you money in the long run on your utility bills.

These are just a few clever ways that you can use your tax return to set yourself up for the future.

Do you have any other good ideas that you’d like to share?


The Importance of Paying Yourself First

Blue Piggy BankIf you are like most other average Americans you will have a list of bills that you have to pay every month, such as rent, cable, internet, cell phone, water, electricity and much more.

If you were to list each of these monthly expenses in order of importance, which would be number one?

The answer is none, because there is one payment you need to make which is even more important than all of these and that is to yourself.

The bill of “You” should be the first payment you make before you make any of your other payments. You can pay this bill by contributing a certain amount of your paycheck into your savings account.

Why is this so important?

It is extremely important because saving your money for the future should not be optional. If you are not consistently saving at least 10% of your income, you are actually living beyond your means.

If you do not pay yourself into your savings account, you will never be able to fund large purchases in life and will have to subject yourself to debt in order to buy what you need.

If an emergency such as losing your job or injuring yourself, you will have no emergency fund to take care of you and you will again be forced into debt.

When you are old enough to retire, you will have amassed no retirement nest egg to support yourself, unless you have been paying yourself first.

Check out a short video on the power of savings here 

Make it Foolproof and Automatic

Call your financial planner right now and ask them if they can set up an automatic direct deposit from your bank account to your savings or investment account.

Schedule it every month for the day that your paycheck comes in. If you earn $400 take home pay per week for example, 10% of this is $40, so you should set up the deposit to put $40 into your savings account every week.

Pretend that it is just another bill for a service that you have signed up for. After a while, you will adjust your spending habits and get used to not having it. Meanwhile, the money will be building up in your savings account and compounding interest.

Paying yourself first with a manageable percentage of your income is one of the easiest ways to grow your savings and prepare for the future. 

The Most Popular New Years Resolutions in North America

What are the most common things that North Americans make goals to accomplish in the coming year when New Year’s comes around? HereHappy New Year are some of the most common New Year’s resolutions, and tips for making them happen.

Spending More Time with Family and Friends

The polls have suggested that more than half of Americans vowed to spend more time with their loved ones in the New Year. As the years pass by we realized that one of most important things about life is who we spend our time with, and the urge is there to reconnect and enjoy quality moments with people we care about.

Why not set up a weekly date with a friend or a family member to enjoy a favorite activity together?

Lose Weight and Become Healthier

One of the most common New Year’s resolutions year after year is a goal to shed pounds, build muscle and eat better. January is a bumper month for gym memberships, personal trainers, and weight loss programs. It’s great to have a goal to lead a healthier lifestyle, as obesity is becoming a serious health threat to our nation.

However, creating and maintaining a healthy physique requires a long term change in habits and not just a short lived fad diet so make sure that the changes you are making are sustainable.

Quit Smoking

Many people make the vow on January 1st to put down the cigarettes forever, saving themselves from a higher risk of lung cancer and a host of other respiratory ailments. They are rewarded with better health and a sense of accomplishment if they are successful in kicking the habit, but it’s not easy.

Cigarettes are so addictive, and the statistics say that %99 of people who try to quit will fail the first time. However, don’t give up if you have tried to quit and failed. Get your friends to help you commit to kicking the habit, and promise yourself a reward every time you get through another week smoke free.

Get Out of Debt                               

Many Americans have a nasty debt hanging over their heads, whether it is a credit card, student loan, car loan, or something else. One of the most popular resolutions for the year for many people will be to eliminate that debt and get finances their back in the black again.

If you want to be successful in eliminating your debts, make a budget and a financial plan where you reduce your expenses and put a chunk of money every month towards paying off your loans. Stick to the plan and you will be debt free by the end of the year!

These are a few of the most common New Year’s resolutions in North America. What is your resolution for the year ahead?

Creating a Holiday Savings Fund

Do you find that every January, you stare at your credit card bill and your bank balance in horror, shocked at how much money you spent in credit card billsDecember on presents, holiday treats, decorations, special outings and more?

The holidays can be a very expensive time of year, and many people tend to get carried away and sentence themselves to a January of barely scraping by.

However, if you plan ahead for next Christmas, you will be able to buy all of the presents you need without even batting an eye or seeing your bank balance dip even once.

How can you do this?

Create a Holiday Savings Fund

It’s quite simple. All you need to do is to open a new bank account the week after Christmas and set up an automatic transfer to pay a small amount from your paycheck into the account every week. The amount can be as small as $10 per week.

Now, $10 per week will seem like nothing to you and you won’t even miss it. After all, it’s less than $1.50 per day. It’s the equivalent of two cups of coffee and a muffin at Starbucks every week.

If you can buy things on sale when you go grocery shopping, you can easily shave $10 per week off your shopping budget without even noticing the difference. You will get so used to having $10 less to spend each week that you will forget it was even there in the first place.

It All Adds Up

However, if you stick to the plan and save $10 per week by next December you will have a fantastic surprise. You will look into your bank account and find $520 that you have saved up effortlessly over the last 52 weeks.

$520 is a big chunk of cash, and it will probably be enough to cover all of the Christmas presents for your family! The best thing is that you can splurge on your holiday treats without having to go into debt.

A Holiday Savings Fund is an easy strategy to save up for the holidays, and you will always have enough to make the season special!

Three Tips for Becoming More Aware of Your Spending Habits

It’s not how much money you earn that will make you rich; rather it is your spending habits. How aware are you of what you spend on a daily money saving tipsbasis? Do you ever think you have a certain amount of money in your account and then realize that you have a lot less?

Noticing how much you spend can be the first step to learning how to manage your money better.

Here are three useful tips for becoming more aware of what you are spending:

Use Cash

There is something about credit cards and debits cards that make it much easier to spend more than you intend to, because you cannot actually see the money leaving your hands. Also, when you use a credit card the money doesn’t come out of your account until much later which makes it hard to gauge how much you have spent.

If you are going out shopping, try taking out as much cash as you will need at the beginning of your shopping trip. Handing over paper bills every time you make a purchase will make you much more aware of how much you are spending. When you open your wallet at the end of the day, you will able to physically see how much change is left over.

Track Your Purchases

Over a month, try saving every receipt from anything that you buy and place it in a plastic bag or an envelope. At the end of the month, total up all of the amounts and sort them into categories such as eating out, clothes, entertainment, household expenses, groceries, etc. You can use a spread sheet on the computer to organize them. Chances are that you will be shocked by the results.

You might have thought you were spending one amount on groceries, eating out, or drinking and then realize that you are spending a lot more!

Check Your Bank Balance Often

With almost every bank offering online banking services these days, you can check the status of your bank account with the click of a button. It is important to keep tabs on how much money you have in your account every day or two. This will help you avoid going into overdraft or having checks bounce, and it will also let you see with your own eyes how much you spend on a daily basis.

If your bank account starts to rapidly shrink before your eyes, it’s time to rethink your spending habits!

Becoming more aware of what you are spending will put you on the right track towards managing your money better.


Ka-Ching! Simple Tips for Trimming Down Your Grocery Bill

Do you gulp with fear every time you approach the checkout at the supermarket? saving money on grocery shopping

Do you end up spending a huge amount on grocery shopping every week, yet only coming home with a few bags of items?

It is possible to cut down your grocery bill drastically; you just need to know how to outsmart the supermarket and get more for your dollar.

Here are some clever tips for getting the most food for the lowest price next time you go grocery shopping:

  • The most important rule is: never go grocery shopping when you are hungry! Make sure you go after you have eaten, or your growling stomach will talk you into throwing many indulgent treats and snacks into the shopping cart that you just don’t need!
  • Don’t be loyal to brand names, because you pay extra for their familiarity. For example, although Heinz ketchup is the most well known, it is also usually the most expensive. The generic brand will probably taste just the same on your hot dogs and hamburgers and if it costs $1.50 less, why not give it a try?
  • Think about where you are shopping. Is it a high end chain supermarket with fancy displays, nice lighting, and beautiful interior design? These types of gourmet grocery stores often overcharge for the same items that can be found at a budget grocery chain for much cheaper!
  • Use coupons on the items that you regularly buy. You can find coupons on fliers in the store, and also at several websites online.
  • Don’t pay extra for convenience. Packaged foods such as microwave meals, prepared snacks, and other easy and quick dishes are usually much more expensive. Buy the ingredients and cook it yourself to save money.
  • Stock up on “loss leaders.” These are items that the supermarket is advertising at a ridiculously low price. They are very cheap because they attract customers in, who will likely spend more money on other more expensive items once they are in the store. If you can stick to only stocking up on the sale items and avoid being tempted by anything else you can really save a lot of money.

These are just a few easy ways that you can trim down your grocery bill and save money at the supermarket!