Happy People Live in Small Houses

If you've felt stressed and short on time lately, maybe your house is to blame - at least that's what Joshua Becker at Becoming Minimalist believes.

After visiting his parents' new downsized home, he sat down with his mom to figure out why they were so much happier living in less square footage. She came up with 12 reasons. Here are some of our faves:

Less time spent cleaning. 'Nuf said.

Less expensive. Smaller homes are less expensive to purchase and less expensive to keep (mortgage, insurance, taxes, heating, cooling, electricity, etc.).

More time. Many of the benefits above (less cleaning, less maintaining, mental freedom) result in the freeing up of our schedule to pursue the things in life that really matter - whatever you want that to be.

Less temptation to accumulate. If you don't have any room in your house for that new treadmill, you?ll be less tempted to buy it in the first place (no offense to those of you who own a treadmill? and actually use it).

Wider market to sell. By its very definition, a smaller, more affordable house is affordable to a larger percentage of the population than a more expensive, less affordable one.

Have you downsized recently? What do you love most (or least) about your new smaller home?

How to make money off your home.

One of the reasons you likely got into home ownership in the first place is because you saw it as a good investment. But real estate appreciation isn't the only way owning a home can make you money. This article in Canadian Living magazine does a great job of highlighting 7 Ways your Home can Make you Money.

In addition to the obvious (i.e. renting out your basement), the article highlights a few less common ways to make money from your home - like running a bed and breakfast (definitely not for everyone) or renting your home out to a television or film company.

Depending on where you live, you may also want to look into making some green renovations. Not only will this save you money in energy costs (which is essentially the same as making money, isn't it?), but some jurisdictions allow you to sell additional energy (like that generated from the installation of solar panels) back to the grid.

Starting your own backyard vegetable and fruit garden may also be an option for you. Not only will this save you money on your grocery bill, but if your garden is big enough - and productive enough - you may also want to look into selling some of your homegrown food at a local farmers' market.

Has your home helped you earn additional income? If so, we'd love to hear how!

Is home buying about to become more difficult?

Just when you thought mortgage rules couldn't be tightened any more, the Office of the Superintendent of Financial Institutions Canada (OSFI) said it's "looking into" doing just that, by potentially eliminating amortizations over 25 years.

Thanks to last year's mortgage rule changes, amortizations over 25 years are no longer available to high ratio buyers - or those with less than 20% down. But individuals with larger down payments can still access 30- and 35-year amortizations.

That's what OSFI is looking to potentially stop. It's currently consulting with financial institutions on the matter to see if this solution is something that makes sense, and if it could potentially help stabilize the housing market (and its ever-rising prices), curb consumer debt levels and reduce the risk of exposure to rising rates.

It's a shame that the government is looking to eliminate this mortgage tool as a means of curbing household debt. Individuals already have to qualify for the five-year posted rate at a 25-year amortization - you'd think that would be enough.

That being said, interest rates have been extremely low for quite a while, and the housing market seems to have resisted previous attempts to cool it down. Finance Minister Jim Flaherty - along with the Bank of Canada - have repeatedly expressed concern over the housing market. They'd rather see a soft landing than a bust - and really, who can blame them?

If you're in the market for a new home or refinance, and were hoping for an amortization longer than 25 years, you may want to give us a call sooner rather than later. You never know when the rules are going to change again!

Must-have tools every homeowner should own

Since deciding to sell my house I've had to do a few repairs.  You know that list of "things that need doing but don't really bug me enough to invest the time"?  Rummaging through the basement I found enough tools to do most of the work but I did have to make a few trips to the hardware store. 

I have decided to share my "must have" list with you.  Hardware stores can be overwhelming if you don't know what you're looking for. Whether you've bought your first home or have decided that 2013 is the year you become "handy", below is a list of "starter" tools every homeowner should have on hand:

1. Toolbox
2. Hammer
3. Pry bar
4. Vise grips
5. Needle-nose pliers
6. Screwdrivers (mixed set
7. Wire cutter/stripper
8. Tape measure (16-foot)
9. Reversible drill with bit set
10. 9-inch torpedo level


If you don't feel like buying each of these tools individually, there are some great starter tool kits available that have everything you need - from screwdrivers to pliers to measuring tapes - in one handy box. With the basics on hand, you can buy additional tools - like hand saws or sanders - as the need arises, which might be a little easier on your wallet.

How to tell if your home is overvalued

It seemed natural that with the introduction of record-low interest rates, threats of housing bubbles wouldn't be far behind. For years, the Federal government, Bank of Canada - and now, the International Monetary Fund - have warned about potential housing overvaluation across the country.

The thing is, saying that houses across Canada are, on average, 10% overvalued doesn't make much sense. Canada is a vast country - and housing markets vary drastically from one area to the next.
So how can you tell if your house is overvalued? Well, that's a difficult - if not impossible - question to answer (unless you're an economist - but even then...). That being said, I've always liked this concept that was printed in the New York Times way back in 2005. It employs a mathematical equation similar to that used in the stock market, to determine if stocks are overvalued. The equation looks at a house's "rent ratio": You take the price of a house in a typical area and divide it by the cost to rent it for an entire year. The result is the rent ratio - and the lower the ratio, the better. Typically anything under 20 is considered "bubble safe".
The article acknowledges this is an imperfect measure - mainly because it's not always easy to find out what your house would get on the rental market. That being said, it has proven to be somewhat useful - and is definitely worth a shot if you're worried about buying a home that's potentially overvalued!