Paying 20% down payment is the wiser choice, or is it?

Taking current economic and fiscal realities into account, it would be far more sensible to pay the initial 20 per cent down payment for a home purchase in full instead of saving the money for later, according to a veteran industry analyst.

In a March 10 piece for The Globe and Mail, markets observer Rob Carrick argued that the mortgage environment of today does not favor those who carefully save and spend their hard-earned funds.

“Home buyers who put less than 20 per cent down are seen as risky enough to require that they pay the cost of default insurance for their lender. But the best mortgage rates are in some cases going to people with small down payments,” Carrick wrote.

“The indignities for diligent savers are piling up. You’ll earn next to no…

2488 Views, 0 Comments

How the U.S. Federal Reserve rate hike might affect Canadians

The U.S. Federal Reserve raised its key interest rate from 0.75 per cent to 1 per cent today, in a move widely anticipated by economists and investors.

The hike is the second increase since December and reflects growing confidence at the central bank that the U.S. economy is now on solid footing.

Meanwhile, Canada’s key interest rate has remained at 0.5 per cent since July of 2015. What does this mean for Canadians and their finances?

1. The spread between fixed-rate and variable-rate mortgages could grow wider

The Fed’s move could lead to higher interest rates for fixed-rates mortgages in Canada, but it won’t have an effect on variable-rate mortgages.

Traditionally, a hike in the U.S. benchmark interest rate will also push up long-term…

2153 Views, 0 Comments

FAQ on getting a mortgage

FAQ Sheet on Getting a Mortgage

Getting a mortgage is a big thing. For first time buyers this can be a tough and complicated process. Here are some common questions that get asked and some answers that may help with your mortgage application process.

SEE OUR MORTGAGE BROKER DIRECTORY HERE

Q: What is the minimum down payment on a home in BC?

A: A minimum down payment for someone who is fully income qualified is five per cent. However, if the purchase price of a property is over $500K, a minimum down payment of five per cent on the first $500K is required. After that, you will be required to come up with 10 per cent on the remaining amount. For example: The down payment for a property valued at $600K would be five per cent of $500K ($25K) plus…

2291 Views, 0 Comments

Little help for housing in B.C. budget

Finance Minister Mike de Jong repeated in his Tuesday budget speech a by-now-familiar message from Victoria: It’s through increased housing starts that the affordability crisis that has gripped urban centres around the province will be eased.

And while he had much to say on the file, he offered little by way of new spending announcements to reduce the high costs of housing.

“I’ve cautioned before and I’ll say it again,” de Jong said, “we can’t just focus on getting more people into the market. On its own, without adding to the supply, that’s just going to drive prices higher.”

De Jong’s words appeared to be aimed in part at local governments, which share a role in pushing forward new construction. He said the province intended to “help ensure…

2092 Views, 0 Comments

Things to Consider When Buying an Acreage or Country Property

Want to buy an acreage? Need more information?

Finding the right acreage for you will provide years of enjoyment. Make sure that pretty piece of land will support your vision. Read on or click below to jump to the subjects:

• Financing for acreage
• Consider the services
• Maintenance and insurance
• Covenants and Zoning
• Tips
• Develop it yourself

More and more people are leaving the suburbs to live a country life, but buying an acreage is a little different than buying a house in the burbs. Buyers should investigate a number of things on the property, assuring them that the land they purchase is going to support the lifestyle they have envisioned.

Danielle lives on an acreage in Kamloops BC, give her a call to let her guide you on…

30200 Views, 0 Comments

Five common RRSP mistakes to avoid while saving this year

It’s been 60 years since the RRSP was introduced as a retirement savings tool.

But that doesn’t mean Canadians have learned all the lessons of the past. Here’s a look at five common mistakes investors make with their RRSPs:

1. Dipping into the funds:

Carol Bezaire, the vice-president of tax, estate and strategic philanthropy at Mackenzie Investments, says the No. 1 blunder is dipping into an RRSP for expenses other than retirement income.

“People are making random withdrawals out of it for vacation or whatever,” she says. “And what they end up with in April is an unexpected tax bill.”

Financial institutions withhold some of the withdrawal — between five and 30 per cent depending on the province and total sum — and, depending on a person’s…

2031 Views, 0 Comments

What investors need to consider before making RRSP contributions

As we near the deadline of March 1 for making your RRSP contributions, I thought it is an appropriate time to give you a “to do” list of financial and investment planning items to review or consider.

Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc.

1. If you are the typical procrastinator when it comes to making an RRSP contribution, consider setting up a monthly payment plan into your RRSP. Making a contribution in the first 60 days of the calendar year allows you the option to choose which taxation year you deduct the amount from your income. There’s nothing that says you have to wait until the following year to make your contribution. This is, of course, dependent on you having earned income…

1818 Views, 0 Comments

How a simple credit error can ruin your home-owning dream

Imagine the anxiety of watching your credit score unexpectedly plummet after spending your entire adult life maintaining good credit.

Now suppose this credit decline blocks you from getting a mortgage on the house you planned to buy. That’s precisely what happens to mortgage applicants all across the country with surprising frequency.

All too often the culprit is unpaid phone bills. In some case's cellphone providers send  accounts to a collection agency after being just more than a month late. That can cause credit score to drop like a lead pickle, approximately 80 points (out of a theoretical 900) virtually overnight.

It never should happen that way or should it? Collections are meant for people who can’t or don’t want to pay their debts right?…

1974 Views, 0 Comments

How to Calculate Your Mortgage Affordability

For many first time home buyers, one of the most confusing – and frustrating – parts of the purchasing process is knowing how much mortgage they’ll qualify for.

While it’s always a smart idea to get a pre-approval before embarking on the house hunt, they are usually a more conservative estimate of your affordable home purchase range. Buyers paying less than 20% own must now also factor in the Bank of Canada’s 4.64% stress test, regardless of the mortgage rate they actually qualify for.

Related: Are there other options if I fail the stress test?

What do Mortgage Lenders Look At?

While the size of your down payment will certainly impact your mortgage qualification, other factors such as debt levels, income and credit score are closely…

2240 Views, 0 Comments

To rent or buy? That is the question

Most Canadians dream about buying and owning their first home

A significant rite of passage, buying a home is not only a big financial deal, it's a big life deal.

Most people assume it's better to buy a home than to rent, and to be honest, I have a bias toward home ownership, too. That being said, I have counseled people on the merits of renting. But there are circumstances where renting maybe better for you.

RENT OR OWN

Every new homebuyer should first understand the differences between "renting and saving" and "buying and owning."

For most people, renting is better on cash flow, not just because mortgage payments are often higher (although with the current interest rates that may not be the case) than rent but because of all the other…

2275 Views, 0 Comments