Your Mortgage is the Best Investment

For your highest and safest return on any investment it is time to pause and look up...to the roof that sits over your head because your home (due to the mortgage that goes along with it) is your best investment.



Would you believe it if you were told that with the investment market in Canada that there is a very safe and secure investment out there that pays around 7 percent annually? This is guaranteed, by the way, with no questions asked or big moves to be made. Would you think you were having your leg pulled?



Its Not Rocket Science



No, this is not something illegal and it's no pyramid or money scam, and no it is not some crazy hot tip on a stock that is going to sky-rocket.



..And no it has nothing to do with some kind of gambling trick or some hot horse out there that is going to dominate the competition in a race at the local track. None of these things just mentioned are guaranteed. Take a look at the past year and a bit, the time we have dubbed a "financial crisis" and you will be reassured of the fact that there are very few guaranteed investments.



It also doesn't even involve a guaranteed investment certificate (GIC), which are thought of as sometimes the safest guaranteed way to make good on an investment.



In fact, with a GIC nowadays, even if you are spending some serious bucks you would be lucky to get half of that percentage rate (the 7 % mentioned above) on a 5-year GIC.



Paying Down Your Mortgage



Well, in case you have not figured it out from the article title by now...the amazing investment opportunity that accomplishes all of this is actually the process of paying off ones mortgage. I know...sounds crazy doesn't it. Paying off our mortgages is the best investment?



Some people would probably even laugh at this thought but think about it, paying off your mortgage is the best investment you can possibly make; here is why.



..



Well beyond the fact that today's mortgage rates are still ultra low when compared to their complete historical past is the fact that it is almost completely impossible to find any investment out there, other than paying your mortgage down, that is going to be a sure thing in regards to yielding a higher after-tax return. In other words no other investment out there is going to result in two things...being guaranteed to yield a high after-tax return.



Still not following?Let's take a look at some math involving some money.



In the case of one's mortgage...your money.



Theoretically let's say you are locked into a fixed-rate (closed-rate) mortgage at 4 %; which is basically the lowest rate you will find right now in Canada currently on any popular five-year term mortgage from lenders in the country. This means that for every $1000 in principal you would be paying $40 in interest annually.



Perhaps you were to make a lump-sum payment of $1000. You would find that you have saved yourself $40 in interest and this would result in an effective after-tax return to you of 4 %.



Not too bad eh? Well it gets even better when you consider what it would take for you to have accomplished the same with a taxable investment in regards to generating the same return.



Guaranteed Returns



Let's talk you annual income for a minute. If you are someone who is in the 40 % tax bracket you would have to earn 6.7 % on a GIC to end up with 4 % after the government takes a big hack out of your earnings. If you can find a GIC that pays anything even close to 6.7% let me and every other Canadian know because you could make a lot of money selling this info.



Not to mention that you would probably want to pour into this investment a lot of your own money because you won't ever see this rate again.



Don't forget the language we are dealing with here is guaranteed returns. Obviously you could end up making a lot more money trading stocks or options. However, they are not guaranteed and in fact with that path you could end up losing a lot of money. The best part of paying off your mortgage is that the return you will be getting from it is risk-free.



It is not very often an investor hears those words..."risk free". It's a beautiful thing.



Remember next time you are cursing having to pay your monthly mortgage fee that in fact you are simply paying into the greatest guaranteed return investment known to man.

The Number Of Mortgage Deals Dropping

Industry figures have shown that the number of new mortgage applications approved by the major banks fell again in December. British Banker's Association (BBA) members approved 42,088 new mortgage loans last month, the lowest figure that has been seen since 1997 when the data started to be collected.



Analysts think that the easiest way to solve this problem is for the Bank of England to cut its interest rates, although this proposition is meeting opposition as well as support as the market is already in turmoil and this is almost an admission of defeat.



The amount of money advanced for home purchases dropped to ฃ15.1bn, a figure last seen in September 2005, and 10% less that December 2006.



The BBA's figures are in agreement with recent data from the Council of Mortgage Lenders (CML), who said that gross lending fell 25% in December to ฃ22.6bn, the lowest monthly figure since May 2005. David Dooks, BBA's statistics director said: "Mortgage lending weakened notably in the second half of 2007 as the credit crunch impacted on banks' ability to lend, at the same time, demand for mortgages also softened in the face of increased borrowing costs and lower disposable income.



"The combination of these factors is resulting in the marked market slowdown and weakness in house prices we are now seeing," he concluded.



Among the news of reductions and falling approvals, there is some good news; the figures showed that net lending increased slightly in December, this is after redemptions and repayments have been deducted. There was also a small jump in the number of loans approved for re-mortgaging customers, with 62,771 new loans given the go ahead, compared to 59,628 in November 2007.



Although if examined more closely this is not necessarily good news, people borrowing against their property is a desperate measure, one which is likely to be caused by the credit crunch and the strict measures in place to regulate unsecured lending.



The chief UK and European economist at Global Insight, Howard Archer, commented on this, saying: "The December BBA mortgage data provide yet further evidence that housing market activity is now being substantially undermined by both stretched affordability and tightening lending practices.



This adds to the already intense pressure on the Bank of England to cut interest rates in February, and to enact significant further reductions thereafter."



Despite that fact that Britain's house prices ended 2008 5-8% higher than when the year began, prices started falling during the second half of the year, under the pressure of higher interest rates. The Bank of England held its interest rates in January 2008, predictions of a February rate cut are prevalent. However Mervyn King, the Bank's governor remarked that inflation concerns may prevent this from happening.



The competition from brokers and adviser to purchase mortgage leads from other companies is red hot at the moment because the demand for mortgage deals is falling. The lower number of customers who are actively looking for a mortgage deal, results in brokers fiercely competing for business against one another.



BBA figures showed that unsecured lending from banks remained subdued in December, while the amount of outstanding debt on credit cards rose by only ฃ200m, a lower figure that expected because customers were repaying more than they spent.



An increase of ฃ400m in the borrowing through loans and overdrafts was also seen in December, and consumers also stashed ฃ1.9bn in saving accounts or investment schemes. This was a ฃ200m increase on November, but was less than the amounts deposited during September and October into banks and building societies.

Leading Regional Mutual Selects SDS Maps' to Streamline Mortgage Application Processing

9th October 2002, SDS Applications Ltd, one of the mortgage industry's leading providers of mortgage lending software solutions today announced that the Vernon Building Society is to use the โ€˜SDS Maps' software for its mortgage application processing. Vernon Building Society has nine branches in the Cheshire area, backed by a local agency network.







โ€œWe were impressed with the powerful architecture of the SDS system,โ€ said David Eccles, Systems Manager at Vernon, โ€œAfter reviewing many solutions, we chose โ€˜SDS Maps' because it offered the greatest flexibility for our needs.



The system is very easy to customise which allows us to meet the changing needs of our businessโ€.







โ€˜SDS Maps' is a fully integrated, web-based solution, handling a mortgage application from customer enquiry through to completion. The system features integrated 'mortgage application specific' workflow, case tracking, powerful document production facilities and customisable management information (MIS) functionality. It is capable of producing pre-application mortgage illustrations and has been designed to be flexible enough to handle future changes to compliance regulation.



At draw down, cases will be transferred electronically to the Vernon's accounting and administration system.







The Vernon are also planning to take advantage of the systems powerful e-commerce functions, these include;







ยท

A 'Broker Portal' where introducers can login and access product searches, create new applications, track the status of applications in progress and view commissions earned and pending.



ยท

Mortgage search facilities, where potential customers can find out how much they can borrow and details of the mortgage products that best suit their needs.



ยท

Online applications to โ€˜Offer in Principle'. (Applications do not have to be completed in one sitting, customers can return to a partially completed form at any time, an application could even be started in a branch and completed later on a home PC).



ยท

Compliant online quotations



ยท

Status Tracking facilities







The application is currently in the user-testing phase and is due to go live in November.











โ€˜SDS MAPS' forms part of SDS's integrated suite of mortgage systems that include;



โ€˜IFAMAPS' โ€" Online Broker Support Module, โ€˜EMAPS' - for interactive on-line applications with status tracking and โ€˜MyPage' โ€" the customisable e-banking module.



About Vernon Building Society



Founded in 1924 in Stockport, Cheshire, the Vernon provides competitive housing finance, savings and investment products. As a mutual, the Vernon's philosophy is to provide a responsive and individual service to it's members.







About SDS Applications Ltd



SDS Applications Ltd is considered one of the mortgage industry's foremost providers of mortgage lending software solutions. The company offers an integrated suite of mortgage processing solutions for lenders and mortgage packagers.



Recent Clients in the Mortgage & Lending sector include GMAC RFC, Solent Mortgage Services, The Chesham Building Society, Barnsley Building Society, Cambridge Building Society, Universal Building Society and National Counties Building Society.







--- ENDS ---







For further information please contact:







Justin Belcher



SDS Applications Ltd



Tel: 01494 778863



press@sdsapps.co.uk















Or visit the Internet site at www.sdsmortgages.com.

Pricing Your Home To Sell

When you're selling your own property, whether it's a house, townhouse, condo, apartment, a finished lot, raw land, a farm, a ranch, or whatever, the first thing to get right is the price you ask for it. If you work with a broker, the legwork is done for you. When you work as a FSBO (for sale by owner), you need to figure it out yourself. Let's look at how to do just that.



Setting a Price



First, don't make the mistake of looking only at what you need to get out of it. It's important to know that, of course, but that number may, or may not, have any relationship whatsoever to market price.



It may be lower or higher than market price. The first is situation is great. The latter may require you to rethink whether you want to sell your property at this time.



If you price your property below market price, it'll be snapped up quickly. The problem, of course, is you'll leave a lot of money on the table. This will lead to a lot of seller's remorse.



If you price your property above market price, it may sit there unsold until the cows come home. If it's priced very much above market price, people won't even come and look at it.



The market place talks and it talks loudly.



So What's Your Goal?



Market price is nearly always a range of prices -- high, medium, and low -- not an exact price. You want to price yourself near the top of the market price range for your property. That way, you'll have flexibility to negotiate price if need be.



The only exception to the above scenario is if you're in a hurry to sell your property. In that situation, you should price yourself near the lower end of the market price range. Even if forced to do this, make sure you leave some wiggle room to negotiate with a buyer.



Buyers will always assume the listed price is negotiable.



How Do You Determine Market Price as a FSBO?



The first way is the simplest and most expensive. Have it appraised by an appraiser who works with one or more mortgage lenders. Call the firm who initially issued your mortgage loan and ask who they use in your area. Be sure the appraiser knows your purpose is to establish the asking price for a sale.



Using an appraiser can cost a few hundred dollars, but it can be money well spent.



In addition to helping you price your property, it can also be helpful to show a buyer with whom you're negotiating that an appraisal supports the asking price.



If you live in an area with a tight pattern of sales prices, you can check the price of sales in your neighborhood over the last three to six months. This is particularly true if you live in a subdivision with houses in a narrow range of sizes and styles. Many jurisdictions have this information online. If not, it is a matter of public record and should be available at the courthouse.



The more individualized and unique your property, the more difficult this approach. With a little work, however, you can learn a lot.



Another method for establishing a price is an online search. If you search for "pricing + house + your state," for example, you should find sites that will help you price your property. Some of these use real estate agents and brokers as resources, and that leads us to another option.



It's really unfair if you don't intend to use a broker to help you sell your property, but if that's your fall back position (if selling on your own doesn't work out), you might invite a broker to do a market analysis of your property for you.



Be up front. Explain that you're going to try it on your own first.



Even under those circumstances, many brokers are willing to help you evaluate the market price of your property without any charge to you. They also usually give you a presentation of how they'd go about marketing your property should you decide to use them. Listen to that carefully, too.



You can start evaluating whether you want to work with this person if you're not satisfied with your FSBO efforts. You also may very well pick up marketing ideas you can implement yourself.



A Note of Caution



Don't rely too heavily on what neighbors tell you in social situations about the sale of their own and/or other properties in your neighborhood. Listen, of course, but be aware that they often just know the original asking price and the fact that there's a buyer in the picture. They don't know that the asking price was lowered because of the condition of the house, a redecorating allowance was given, etc.



Don't talk to a neighbor and then think, "Well, that house sold for $X, my house is in much better condition; therefore, I should be able to get $X + $Y.



" Maybe so. Maybe not. Base your pricing decisions on the most solid information available to you, not neighborhood gossip.



If you base your pricing decisions on solid information and use good common sense, you should get a good result. In this case, a good result means a quick sale!