May 29, 2013

10 Most Common Interview Q&A

There's no worse feeling than when you're in an interview and the interviewer asks you a question to which you don't know the answer. The best way to handle this dreaded debacle is to go into the interview prepared. Familiarize yourself with a few common difficult questions and arm yourself with answers prepared ahead of time.

Check out these tough interview questions and some suggested responses in order to avoid an interview disaster:

Tough question No. 1: "Tell me about yourself."
This is usually the opening question in an interview and it's the perfect moment for you to toot your own horn -- not to tell your life history. Your answers should be a quick rundown of your qualifications and experience. Talk about your education, work history, recent career experience and future goals.
Suggested answer: "I graduated from University X and since then, I have been working in public relations with an agency where I have generated millions of PR hits for my clients. While I've enjoyed working on the agency side, I'm looking to expand my horizons and start doing PR for corporate companies such as this one."

Tough question No. 2: "Why did you leave your last job?"
This is your chance to talk about your experience and your career goals, not to badmouth a former boss or give a laundry list of reasons for your exit. Instead, focus on what you learned in your previous position and how you are ready to use those skills in a new position.
Suggested answer: "The company just wasn't a good fit for my creativity, but I learned that organizations have distinct personalities just like people do. Now I know where I'll be a better fit."

Tough question No. 3: "Where do you see yourself in five years?"
Let the employer know that you're stable and you want to be with this company for the long haul. Keep your aspirations to take over the firm with which you are interviewing, own your own company, retire at 40 or be married with five children to yourself.
Suggested answer: "I want to secure a civil engineering position with a national firm that concentrates on retail development. Ideally, I would like to work for a young company, such as this one, so I can get in on the ground floor and take advantage of all the opportunities a growing firm has to offer."

Tough question No. 4: "What are your weaknesses?"
The key to answering this age-old question is not to respond literally. Your future employer most likely won't care if your weak spot is that you can't cook, nor do they want to hear the generic responses, like you're "too detail oriented" or "work too hard." Respond to this query by identifying areas in your work where you can improve and figure out how they can be assets to a future employer. If you didn't have the opportunity to develop certain skills at your previous job, explain how eager you are to gain that skill in a new position.
Suggested answer: "In my last position, I wasn't able to develop my public-speaking skills. I'd really like to be able to work in a place that will help me get better at giving presentations and talking in front of others."

Tough question No. 5: "Why were you laid off?"
This question will become more common as the economy continues to slow down. It's a tough question, however, especially because many workers aren't told exactly why they were laid off. The best way to tackle this question is to answer as honestly as possible.
Suggested answer: "As I'm sure you're aware, the economy is tough right now and my company felt the effects of it. I was part of a large staff reduction and that's really all I know. I am confident, however, that it had nothing to do with my job performance, as exemplified by my accomplishments. For example..."

Tough question No. 6: "Tell me about the worst boss you ever had."
Never, ever talk badly about your past bosses. A potential boss will anticipate that you'll talk about him or her in the same manner somewhere down the line.
Suggested answer: "While none of my past bosses were awful, there are some who taught me more than others did. I've definitely learned what types of management styles I work with the best."

Tough question No. 7: How would others describe you?
You should always be asking for feedback from your colleagues and supervisors in order to gauge your performance; this way, you can honestly answer the question based on their comments. Keep track of the feedback to be able to give to an employer, if asked. Doing so will also help you identify strengths and weaknesses.
Suggested answer: "My former colleagues have said that I'm easy to do business with and that I always hit the ground running with new projects. I have more specific feedback with me, if you'd like to take a look at it."

Tough question No. 8: "What can you offer me that another person can't?"
This is when you talk about your record of getting things done. Go into specifics from your résumé and portfolio; show an employer your value and how you'd be an asset.
Suggested answer: "I'm the best person for the job. I know there are other candidates who could fill this position, but my passion for excellence sets me apart from the pack. I am committed to always producing the best results. For example..."

Tough question No. 9: "If you could choose any company to work for, where would you go?"
Never say that you would choose any company other than the one where you are interviewing. Talk about the job and the company for which you are being interviewed.
Suggested answer: "I wouldn't have applied for this position if I didn't sincerely want to work with your organization." Continue with specific examples of why you respect the company with which you are interviewing and why you'll be a good fit.

Tough question No. 10: "Would you be willing to take a salary cut?"
Salary is a delicate topic. In today's tough economy though, how much a company can afford to pay you might be the deal breaker in whether or not you are offered a position.
Suggested answer: "I'm making $X now. I understand that the salary range for this position is $XX - $XX. Like most people, I would like to improve on my salary, but I'm more interested in the job itself than the money. I would be open to negotiating a lower starting salary but would hope that we can revisit the subject in a few months after I've proved myself to you."

May 24, 2013

Variable Rate Mortgages When Rates Are Rising

The homeowners have enjoyed a long period of low interest rates. To say it has been a great ride is an understatement, however there does seem to be a trend towards increasing rates. The question is, "What should I do now?"

The prime lending rate, which is used for variable mortgages, is at 3%, with current pricing for variable mortgages below prime, ranging from 2.15% to 2.85%. I will use 2.50% for variable rates as it is close to the median. Let's compare that to the 5-year fixed rate, which is currently at 4.14%.

Currently there is a variance of approximately 1.64% between fixed and variable. So, each day, week, or month that goes by, your cost of borrowing is dramatically less. There is also the opportunity cost, which would be the difference between your payments for fixed or variable. Take for example a mortgage for $200,000 on a variable rate the payment is $897.23 per month, versus the 5 year fixed rate at $1,067.27 per month. So, what can you do with the $170 difference every month? That could cover date night and a babysitter or a couple of rounds of golf. Hmmmm.

Can rates increase and diminish the variance between the terms? Yes, they can. The questions we don't have an answer to is how long will it take to equal the fixed rate, and where will rates go.

What we do know is that there have been studies over the last 15 years which show that less interest is paid with a variable rate mortgage than a fixed rate. That being said, I still go back to the nature of the individual. What is your comfort level? Can you sleep soundly at night with a variable rate, or do you need the fixed rate?

There are other methods to reduce the principal of your mortgage without taking a variable rate mortgage, contact your local mortgage specialist to sit down and discuss your options.

May 13, 2013

Monthly Home Budget Considerations

Whether you are buying your first home, trading up to accommodate a growing family, or even downsizing, one of the most important things you must do when house hunting is create a monthly budget. A budget is simple to put together and will help you avoid financial headaches in the future.

In order to create your budget, the first thing the experts will recommend us to do is make a list of all our current monthly obligations. Start with items that will likely continue after we have bought the house, such as credit card payments, student loan payments, car payments, retirement saving contributions and so on. Now add in the discretionary spending such as the latte we get every few days, the dining out with friends and the money we are setting aside for a vacation. Are there things that we are willing to give up that would free up some cash to put towards the mortgage? After looking closely at our own budget, how much do you have left over, and how much of that are we comfortable putting towards a mortgage payment?

At this point I think it’s important to introduce the term "Total Debt Service," or TDS for short. This number is the result of dividing all our monthly obligations by our gross (before tax) income.

Here is an example of a TDS calculation: Assuming the gross monthly income is $6,000 (before tax) and the monthly expenses include:

$1,500 Mortgage payment
+ $400 Property taxes & Utilities
+ $200 Credit card bill
+ $400 Car lease payment
= $2,500

Total monthly obligations $2,500/$6,000 gross monthly income = 41.6%.

TDS is important because it determines what we can afford, and lenders use this number to qualify us for a mortgage as well. Technically, the lenders has a limit of 40%, but generally the cut off point is 42% to 44%. If you are applying for a mortgage and your TDS is higher by a per cent or two, be sure you can back it up with an excellent credit score and a down payment of at least 20%.

There are a number of online calculators at your disposal and they will help to determine the maximum mortgage payment we can afford. Now ask ourselves, do we want to max out on your mortgage payment? Most online calculators do not have space to put your morning coffee in or your gym membership or the tickets you bought for TIFF. The reality is that most of us will have to sacrifice some of the fun things in life to own a home, but don't let your mortgage payment control you.