Nicole Hayes' November Home Newsletter

Nicole works for you, not the lenders.

Deciding Between a Variable or Fixed Rate Mortgage.

As you know, a fixed mortgage has a rate that's locked in for a set number of years, while a variable mortgage has a rate that floats with market conditions. On average over time, you'll usually come out ahead with a variable mortgage. One study suggests that between 1950 and 2007, 90% of the time it was better to have chosen variable over fixed.

The reason for this is the premium banks charge on fixed mortgages. For a bank to guarantee a rate for 5, 10 or 25 years, it's taking a risk that rates will rise during that time, resulting in the bank losing money. To reduce this risk, the bank charges a little more for a fixed rate. Since that risk doesn't exist with a variable mortgage, the rate is lower.

Having said this, there are other factors to consider. Currently, the difference between fixed and variable rates is very small. At the same time, interest rates are at historic lows. Thanks to all the government stimulus spending, inflation is expected to rise in the next year, therefore interest rates will rise too. So since a fixed rate doesn't cost much extra right now and guarantees a historically low rate over the long term, many people believe it's the right choice for the times.

However, the only way to know for sure is to have an analysis done of your financial situation. If you don't have much equity, are worried about your job and can't afford to have your mortgage payments rise, a fixed rate may be best. On the other hand, if you have lots of assets, stable income and can live with some rate fluctuation, you may do better with variable-especially since you can lock into a fixed mortgage as soon as rates start rising. As your local mortgage advisor, I'd be happy to perform a free mortgage analysis to help you with this important decision. It may be in your best interest to call me today.

Current Best Mortgage Rates

The Mortgage Centre Rate Update - November 6, 2009

		Closed	Quick Close Specials
First Mortgages Second Mortgages Also Available	6 month	3.85%
	1 year	2.25%
	2 Year	3.05%
	3 Year	3.05%
	4 Year	3.85%
	5 Year	3.85%
	7 Year	4.60%
	10 Year	5.30%
	Variable	2.15%	3.05% (open)
	Prime @ 2.25%

These rates are are subject to change at any time without notice. Please contact my office for up to the minute rates.

Winterizing Your Home Can Save Energy, Money and Inconvenience

Here's a checklist of things to do:

Check your furnace and ducts. Have an HVAC professional inspect your furnace and clean your ducts. Make sure your filter is clean, and change it monthly. If ducts are exposed, insulate them. Consider buying a programmable thermostat.
Add extra insulation. If you can see the ceiling joists in the attic, chances are you don't have enough insulation. Either hire a professional or get advice from your local hardware store.
Find and repair air leaks. On a windy day, hold a lit incense stick near windows, doors, electrical outlets, etc. Seal any leaks. Consider buying energy efficient windows. In the meantime, install storm windows or insulating film.
Check the roof, gutters and downspouts. Make sure the roof flashing is sound and replace worn shingles. Clean out gutters and downspouts. Install downspout extensions to direct water at least 10 feet away from the house.
Seal out pests. Rake away debris and edible vegetation from the foundation. Seal any potential entry points. Secure crawlspace and attached garage entrances.
Prepare your pipes. Insulate exposed plumbing pipes. Drain garden hoses and air conditioner pipes.
Reverse the direction of ceiling fans. This pulls warm air down into the room and circulates it.

Financial Freedom Tip of the Month:
7 reasons why starting a small home-based business makes sense.

As unemployment rises, more people are choosing to start their own home-based business. Fortunately, thanks to improvements in computers and the Internet, this is a lot easier than it used to be. Here are just a few of the benefits of being self-employed at home:

Low overhead. Working from a home office saves thousands of dollars in rent and commuting costs, which makes start-up expenses more affordable.
More freedom. You have the flexibility to set your own schedule and hours, so you can fit in child care, fitness and social activities more easily.
More time. Think of all the time you'll save by not commuting!
Less bureaucracy. You have no boss or co-workers, and there are fewer interruptions so your productivity is higher.
Career mobility. Since you can move your business anywhere, you can accommodate a spouse's transfer, live close to family or choose your ideal climate and environment.
Tax advantages. Using part of your home as your place of business means many of your household expenses may be deductible, as well as any business-related transportation, entertainment or travel expenses.
Supplement your existing income. Since you're working from home with low overhead, you can earn extra income without quitting your day job. By investing this extra cash in real estate, mutual funds, etc., you can move yourself closer to financial security!