Three years ago, there was a real boom in real estate in the state of Toronto. Our family who lived there took a decision to move out, and sold our town home. The result was a nice tidy sum, enough to pay off a previous mortgage, and give a good profit. The money we got from this sale enabled us to purchase a large house in Winnipeg. We paid in cash for a house that had four bedrooms in it and seemed to have plenty of character! The relocation and parting, though not very pleasant, was worth every penny!

When we bought this house, it needed renovating and so the old owners demanded only $65,000 for it. Since then, some repairs have been carried out on the house. Of course, some more work has to be done. Like for instance, installing a solid hardwood floor over the entire living area. But these minor problems can be sorted out. A comforting factor is that the same house would have fetched huge dividends in the Toronto real estate market, and so was well worth it! The house is on a sprawling estate and it seems as if the property is almost double in size. Winnipeg real estate prices go up by 20% every year. So the new home would fetch at least $300,000 in the Toronto real estate market. If renovated completely, the price would go up to $500,000. The location also has a say in the price.

Toronto prices have shot up so much that people who want to buy a house have to shell out $250,000! Others have to forget about settling in a nice neighborhood or a place with good amenities, the condition of the place, etc. They can only live in town homes or condominiums. The house could be in any condition–the price would not change. The real estate listings of the city of Toronto therefore prove to be quite mind-boggling for someone who is not prepared for it!

Obviously we’re thrilled that we made our move when we did. We no longer battle through gridlock to and from work. Road rage is virtually non-existent in our city. There are tons of actual houses for sale well below $100,000 in a variety of neighborhoods to choose from. Manitoba Hydro offers several incentives for homeowners, so even if you buy a fixer-upper, you have options for installing brand new windows and high efficiency furnaces, without having to worry about high interest rates on your loan payments. And yes, we even have townhomes and condominiums for sale, but the maintenance fees are a fraction of what is demanded in Toronto’s real estate market.

Toronto real estate prices drive people away; Winnipeg prices and conditions attract people. Thus, anyone will find this a place to be comfortable in.

This place is a boon for our children who are enjoying the big and open spaces. The family has learned to lead life at a slower pace, giving enough time to each other. Family and friends are far away, but not so far that we cannot keep in touch. This place came as a blessing three years ago, and we pat ourselves on our backs for making the right decision at the right time!

The average foreclosure rate nationwide has now topped 30%, with many in the pessimistic camp of the trade predicting that it will continue to get worse before getting better. Behind this statistic is the fact that the majority of these foreclosures could have been averted. With the right mindset and guidance, affected homeowners actually have the upper hand in negotiating their way through their respective foreclosures.

Having that said, facing foreclosure now isn’t any easier than at any time before. When foreclosure looms as a result of mortgage payment default, more than just the property is at stake. It’s therefore a matter to be attended to with utmost diligence and deliberation. The foremost question is always whether to resist or submit to it. Either way, how you go about it will have a significant impact on how you come out of it.

The decision to fight or let must be based on methodical and comprehensive evaluation of all options that are available at this point. Fortunately, help is found all around and extensive information on foreclosure rescue and mitigation programs is readily available: lender negotiation, relief program, alternative funding and refinancing, disaster benefits, scam artists and predatory lenders, financial advice and counseling, respite service and so forth.

Most beleaguered homeowners would strive to stop a foreclosure if at all possible. Once that decision has been formed, it’s a race against time right away as options run out as the clock ticks. On the other hand, never allow yourself to be overcome with panic. There are two basic approaches to deal with a foreclosure in a calculated manner namely third-party representatives and DIY (do-it-yourself). The choice is rather individual as each has its merits and price.

It’s quite common for affected homeowners to adopt a mixture of both approaches. In any case, it should be fundamentally along the line of the following steps: -The homeowner occupies the central role and calls the shots. -Take precautions against scams and predatory lenders. -Explore all available options even if chances of eligibility appear remote. -Remain targeted and single-minded.

The internet and other media are flush with information to help you do that. There are also many guides and handbooks retailing very competitively to initiate the layman to stop foreclosure.

A little light can now be seen at the end of the tunnel. Consumer confidence (Conference Board, June 2008), home prices (S&P/Case-Shiller, May 2008) and economic growth (GDP Commerce Department 2Q 2008) all topped expectations. Furthermore, the Housing and Economic Recovery Act 2008 has been enacted. That?s a big shot in the arm for 400,000 foreclosure-bound homeowners while also injecting liquidity into the faltering credit market.

The mortgage market has changed but for many, it has gotten better. Most folks don’t know this. Interest rates have come down. Tell your friends and neighbors and be happy. Now, for those of us currently without jobs, or those that have some credit issues and no money down, the approval requirements have become a bit stricter as they should. On the flip side, new first time buyer programs have evolved that are absolutely fantastic and even offer below market interest rates. Even with all these good things happening, we find that there are many folks out there right now paralyzed by the negativity of the press. We term this analysis paralysis! Folks want to buy or refinance a home, or investment property but are scared. They don’t realize how good we have it here, especially in the RTP area which is really a bright light in the USA right now. This is a great market here. People think “I am not sure I want to sell my home right now but I really do want to buy a new home..” They may not really realize they can buy that bigger home and get a really good deal on the next house and the mortgage right now. The home they are buying is more expensive than the home they live in currently, this can be a good leverage advantage. The other thing to consider here in the RTP area is consider keeping your home, renting it and buying another home. We do have a strong rental market here. Don’t be too fearful of making a move, if you wait until everyone else makes a move, then the laws of supply and demand kick in and prices go up as demand goes up.

Here is more good news; Mortgage rates really have come down quite a bit. Most folks are not aware of this at all. Mortgage rates are at 12 month lows. It is a GREAT time to refinance, look at mortgage options and get out of adjustable rate loans. Many families are considering equity repositioning and taking cash out of their homes to buy other properties and taking advantage of the real estate market. Many investors are sitting on the sidelines waiting to pounce on every good deal they can get their hands on. There have been some excellent new loan products that have come out in the market, particularly for first time home buyers to help them get into homes. Here are a few: down payment assistance programs, bond programs with below market interest rates, programs that are 100% financing with no mortgage insurance (even if you are not a first time home buyer)! Folks are just not aware of this good stuff because the media is showing more bad things than good things right now. This scares people. Have the courage to step outside of what the press is telling you and examine what our geographic market offers. It could be huge opportunity for you.

What has changed? You want to know the facts:

1. If you have credit issues, it will be more important now to get a formal preapproval with a lender that you meet with. Allow your mortgage planner to help you get a better deal/rate by helping give you tips to increase your credit scores. We do this at no cost for our clients. Look for our credit improvement workshops on line.

2. No doc loans- These are loans where no income or no assets are verified. These have become much tougher to do in the current mortgage market. If you need this type of product, talk to a certified mortgage planner in advance of purchasing.

3. When buying investment property, you need to put down approximately ten percent. There are no PMI options only with 10% down. This is a good thing and makes more of the payment tax deductible.

4. As with all things in our world, business cycles as does everything. This is normal and expected and necessary. We as lenders are not giving zero down loans to folks who do not have enough income or who do not have decent credit any more. It is my opinion that the mortgage market was in a way a microcosm of our economy. The market was/is looking ways to make money and just became too lenient w/ some practices. This is why the mortgage correction happened. This is a natural cycle and happens in every business. For the many of our customers there is a big opportunity to buy now. We are in a great market and many families are finding ways to take advantage of moving up, renting their existing homes and cashing in on these low rates. There is a lot of information on Real Estate Investing as a wealth building tool and you are welcome to check our website for upcoming workshops.

Talk to your real estate agent about your current situation they are great partners and can give you an accurate idea about both your current property situation and your new property scenario. They know the market better than anyone.

While there are multiple reasons for the current mortgage crisis, part of the responsibility lies with borrowers who bought homes and acquired mortgage financing they couldn’t really afford. The result has been many people hurting themselves, and in a classic ripple effect, harming the entire global economy.

Thankfully, people who are buying a home now have the opportunity to strengthen our long-term economy and protect themselves by considering and acting on good financial advice. One of these key pieces of advice is to live within one’s means. This is true whether buying a home or choosing what to eat for dinner.

Heeding the advice listed below can assist you in living withing your means, having greater peace of mind, avoiding foreclosure, and creating greater stability in the economy.

1.Don’t buy until you have a large enough down payment. It is still possible to obtain financing with small down payments, but it is wise to follow the traditional guideline of a 20% down payment. Doing so will decrease your debt and give you a smaller mortgage payment which translates into less financial strain and stress. You may have to wait to in order to pay a high down payment on your dream home but doing so can bring great rewards.

2. Have sufficient savings. It’s important also to keep money in reserve that can be used to pay your mortgage payment in case of loss of employment or other emergency. In fact, most loans require at least a couple months of reserves. Having three to six months worth of payments in savings can bring peace of mind and allow you to avoid foreclosure or dings on your credit should something happen to your source of income or unexpected expenses arise.

3. Consider all the costs of owning a home. When determining how much you can afford as a homebuyer, you should consider the expense of furnishing, improving, and maintaining your home. How much will the bed, couch, table, chairs, and lawn mower, etc. cost? You’ll have to pay for your own plumber now. Can you afford both the house you want and all the additional expenses that go with owning a home?

4. Consider all your debts. It’s important to add all your current debts (credit card debt, auto loans, payment plans) to the amount of your proposed mortgage loan. Will paying off debt take up more than half your income? After you buy your home, home much money will be availabe for savings, investments and just everyday living?

Acting on the points above means you may have to exercise some delayed gratification and discipline, but doing so will help you enjoy the house you buy and play a role in preventing a future mortgage crisis.