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…

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4 dos and don’ts of buying your first home

Thinking of buying your own place? It’s normal to feel a little overwhelmed.

After all, it’s the biggest purchase you can make. In an effort to remove some stress from the equation, here are a few tips from the experts.

What to do when you’re a first-time home-buyer:

1. Get pre-approved.

Some real estate agents won’t even work with you until you’ve been pre-approved for a mortgage. This is an important first step in the home-buying process. You don’t want to start house-hunting and fall for a home you can’t afford.

Plus, there may be problems with your credit that you don’t know about.

“Sometimes people are just unaware that they may have like a Sears card that they forgot to cancel and it’s caused a problem on your credit rating,”…

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Home ownership vs other investments

Buying a home may be one of the biggest investments you ever make. But it differs from other types of investments in a number of important ways. Before you buy, make sure home ownership is the right choice for you.

4 key differences

1. May be hard to get your money out

Some investments lock in your money for a while. But you can usually pay a penalty and get your money out if you really need it. Buying a home may tie up most of your savings. Turning it into cash means selling it or renting it out — and that can take a lot of time and effort, especially in a slow market.

2. Difficult to plan for all the costs

Most investments have costs like commissions and fees. The costs to maintain a home are different, and many are hard to plan for.…

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B.C. real estate market forecast for 2017

Turns out 2017 might be the year when B.C. home buyers will finally get a break. But don’t bother throwing a party, yet.

Price drop is due to a lack of supply 

The Canadian Real Estate Association (CREA) predicts prices will drop by about 7.8% in 2017 in B.C., primarily due to a lack of supply of higher-priced single family homes in the Lower Mainland and Vancouver areas.

CREA’s Chief Economist, Gregory Klump, likens this forecasted price decline as the equivalent of removing the basketball team from a Grade 8 class. “Throw in the basketball team and the average height shoots up. The same applies to markets with higher-end homes.” He continues by saying that, “The forecasted drop in B.C. home prices largely reflects an anticipated decline in…

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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…

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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…

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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…

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B.C. real estate reform: What you need to know

You will have heard about the changes to British Columbia real estate laws

The British Columbia government is in the midst of a wide-ranging overhaul of how the housing market is regulated and taxed, amid growing concerns that foreign ownership, rampant speculation and unscrupulous real estate agents are fueling an affordability crisis.

On Aug. 2 2016, a 15-per-cent tax took effect for home purchases in the Metro Vancouver area involving foreigners. During the past several months, the province has also announced an end to self-regulation, largely in response to a series of Globe and Mail investigations into questionable practices within the industry. This has included a tax on vacant homes in the City of Vancouver.

These are in addition to what…

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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…

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CMHC raising mortgage insurance premiums for new buyers

OTTAWA, ON. – The Canada Mortgage and Housing Corporation is raising the cost of mortgage loan insurance for new home buyers effective March 17th. The Crown Corporation estimates the increases will add about $5 to a monthly mortgage payment for its average home buyer.

TO READ THE FULL NEWS RELEASE CLICK HERE

Regulatory requirements that came into effect on Jan. 1 that require mortgage insurers to hold additional capital. The premiums are calculated based on the loan-to-value ratio of the mortgage being insured. The size of the increase in rates depends on that ratio.

For instance, new homeowners who make a down payment between five to 9.99 per cent can expect an increase of $6.59 to their monthly mortgage if their loan is $350,000.

For the…

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