The Bank of Canada (BoC) announced at the end of April 2018, that after a weak economic performance in the first quarter of 2018, it is predicting a rebound for the economy in the coming months.
“GDP growth in the first quarter was weaker than the Bank had expected but should rebound in the second quarter, resulting in 2 percent average growth in the first half of 2018,” reads the BoC announcement.
The weak first quarter performance — which saw GDP growth fall sharply from 2.5 to 1.3 percent — has been widely attributed to a flagging housing market, as home sales dropped after the introduction of a new mortgage stress test on January 1.
“Slower economic growth in the first quarter primarily reflects weakness in two areas,” reads the Bank’s announcement. “Housing markets responded to new mortgage guidelines and other policy measures by pulling forward transactions in late 2017…Some of the weakness in housing…is expected to be unwound as 2018 progresses.”
According to BMO economist Benjamin Reitzes, the central bank’s more optimistic outlook for the second quarter reflects a belief that the housing market has adjusted to the new mortgage stress test, and will soon begin to recover.
“While Q1 GDP growth was cut sharply to 1.3 per cent…Q2 was introduced at a very solid 2.5 percent, suggesting that the BoC is looking for some stability in housing over the coming months, at a minimum,” he writes in a recent note.
Reitzes also agrees that a warmer housing market is likely this spring. “We’re looking for a similar rebound in Q2, so can’t argue with that,” he writes.”
It’s a sentiment echoed by Scotiabank economist Marc Desormeaux, who believes that the housing market is on its way to bottoming out, and will see a surge in activity later in the year.
“March’s uptick in home purchases [of 1.3 per cent] implies some bottoming out of sales activity, he writes, in a recent note. “Following the first quarter contraction, we anticipate a modest but broad-based recovery in sales activity [in the second quarter.]”
Deal with the Saskatoon Mortgage broker experts you can trust at Your Mortgage Now and be sure that you have looked at all of the options, and that you have the best mortgage products and the best mortgage rates to suit your needs.
Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders.
Mortgage Payment Difficulties
When unforeseen financial circumstances impact your ability to make regular mortgage payments, or disaster strikes, it’s important for you to take quick action. With early intervention, cooperation, and a well executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.
What Can We Do to Help?
If you find yourself facing financial difficulties, as a result of job loss, family income reduction, or for other reasons, it can be an overwhelming experience leaving you feeling uncomfortable and unsure of what to do. By following these three simple steps, you can make a big difference in resolving your financial difficulties.
1. Talk to your mortgage professional
To increase the chance of successfully managing your financial situation through early intervention, call your mortgage professional at the first sign of financial difficulty;
Ask the mortgage professional about information on the options available for managing your financial situation; and
Keep the mortgage professional informed as circumstances evolve.
2. Clarify the financial picture
In order to help your mortgage professional fully understand your financial situation, before meeting with them, prepare a detailed list of financial obligations including any credit cards, loans, household bills with the amounts owing and their due dates. Be sure to include information about your current income, savings accounts, investments, and any other assets.
3. Stay informed
The more information you have at your disposal on managing your finances, the easier it will be to make the right decisions.
Take Charge of Your Debts is an online tool from the Government of Canada that is designed to help borrowers like you understand debt problems, and includes information on making a budget, budget counselling, collection agencies, credit, and credit repair. To view this tool, log on to www.ic.gc.ca(Industry Canada) and search for “Take Charge of Your Debts”.
How Can Your Mortgage Now and CMHC Help?
Your mortgage professional wants to establish and maintain a positive relationship with you over the long term, and is fully trained and equipped with the tools to help you deal with the temporary financial setbacks that you may be facing.
For mortgages insured by Canada Mortgage and Housing Corporation (CMHC), CMHC provides mortgage professionals with tools and the flexibility to make timely decisions when working with you to find a solution to your unique financial situation. These tools include:
Converting a variable interest rate mortgage to a fixed interest rate mortgage in order to protect you from a sudden interest rate increase, should one occur.
Offering a temporary short-term payment deferral. Your mortgage professional may be prepared to offer greater payment flexibilities, particularly if previous lump sum prepayments have been made, or if you have previously chosen an accelerated payment schedule.
Extending the original repayment period (amortization) in order to lower your monthly mortgage payments.
Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period.
Offering a special payment arrangement unique to your particular financial situation.
CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In every case, the options available will depend upon your individual financial circumstances.
CMHC Tools to Support Canadians Affected by Fires in Fort McMurray and Area
CMHC joins Canadians in expressing our concern for the people of Fort McMurray and the surrounding area that are dealing with devastating forest fires.
As residents continue to deal with the effects, CMHC wishes to remind mortgage professionals that we can help you assist homeowners that may be affected by these unfortunate events. and their impending Mortgage Payment Difficulties.
For borrowers with CMHC-insured mortgage loans that are affected by the fires and who may require special arrangements to meet their mortgage payment obligations, CMHC offers Approved Lenders a series of default management tools including:
o Deferral of payment o Re-amortization of the loan, to result in lower payments o Capitalization of outstanding interest arrears and other eligible expenses o Special payment arrangements o A combination of the above
Approved Lenders have the flexibility to make these special arrangements quickly and without CMHC approval provided that they retain a documented analysis of the borrower’s financial situation on file. Approved Lenders can refer to the CMHC Homeowner Default Management Guide for complete details on CMHC’s default management program. Please find attached a flyer providing a summary of these arrangements.
Approved Lenders are reminded that properties must be adequately protected by standard insured perils and that any damage exceeding $5,000 should be reported to the CMHC Claim Payment Centre.
CMHC recognizes that homeowners affected by the fires may experience some financial hardship due to income shortages resulting from temporary evacuations or due to the need to rebuild or repair their homes. CMHC encourages homeowners with CMHC-insured mortgages to contact their financial institution at the first signs of financial difficulty to discuss their specific situation.
To help you share information with any of your clients that may be affected, please also find attached CMHC’s “Dealing with Mortgage Payment Difficulties” factsheet.
CMHC’s Default Management Tool Selector can also help lenders to determine what CMHC default management tools are most appropriate given the borrower’s circumstances. CMHC also offers comprehensive training to Approved Lenders covering CMHC’s default management tools and more. If you are interested in obtaining training, please contact your CMHC Account Manager, Client Relations.
CMHC’s Default Management and Claim Specialists are also available to assist you at any time, including before a default occurs and during early stages of payment delinquency. The Specialists have the expertise to help you manage unusual or complex default situations. Contact the Claim Payment Centre, Monday to Friday at 1-866-358-9999or by email at email@example.com, to speak with a Specialist. You can work with confidence, knowing that you are supported by an experienced and informed mortgage loan insurance provider in the Canadian housing market.
Do not hesitate to contact me if you have any questions or require assistance.
CMHC is Canada’s national housing agency. For over 65 years CMHC has shared a wealth of knowledge and housing expertise to help create an informed and reassured homeownership experience for Canadians.
Devin Cristo and Wes Will are Trusted Saskatoon Licensed Mortgage Associates with Your Mortgage Link, Brokerage License #315794. Your Mortgage Link is a Saskatchewan based brokerage operation, with offices in Saskatoon and Regina, competing in the wholesale mortgage market Canada wide. Our goal is to offer clients a broad range of mortgage products, and create competition between many of Canada’s top lenders. More than anything we want to make your mortgage experience as stress free and easy as possible. We are never happier than when are clients share that we achieved that … as in the testimonial below.
Your Mortgage Now Testimonial from Sarah
“Going through a divorce is a stressful, emotionally stunning time. Thinking about all the ins and outs of daily life not to mention the big picture items such as mortgage, bills, children’s care and expenses that accumulate with legal fees is overwhelming and pressure-filled. It is not insurmountable however when you have the right people in your corner, working with you, being patient with you, and providing you as much guidance as they can as you navigate through the waters. Devin and his team have gone above and beyond for someone like me. I felt respected and listened to at all times, and my concerns were real. I never felt rushed and I was encouraged to ask questions when I needed more explanation. I felt cared about and for. When the time came for some excitement and I wanted to remain optimistically reserved I was granted the time to smile as they also felt excited for me. Devin is a kind, patient, and heartfelt businessman. I am grateful for the support through what I know to be one the hardest things to go through in this lifetime. I have a new mortgage and my smiles exist and I feel safe and secure for myself and my children. Hard work is ahead of me but with this kind of professional care I know I am not alone and that has made the world of difference. For all people going through divorce I recommend this team from the bottom of my heart. ”
As your licensed mortgage associates, we want to ensure you are well prepared for home ownership. This includes the many monthly fees that many homeowners don’t see coming. Some of them, like taxes, may not be billed monthly, so do the calculations to break them down into monthly costs.
How To Calculate The Monthly Costs of Owning a Home.
The Mortgage Payment For most home buyers, this is the largest monthly expense. The actual amount of the mortgage payment can vary widely since it is based on a number of variables, such as mortgage term or amortization.
Property Taxes Property tax can be paid in two ways – remitted directly to the municipality by you, in which case you may be required to periodically show proof of payment to your financial institution; or paid as part of your monthly mortgage payment.
School Taxes In some municipalities, these taxes are integrated into the property taxes. In others, they are collected separately and are payable in a single lump sum, usually due at the end of the current school year.
Utilities As a home owner, you’ll be responsible for all utility bills including heating, gas, electricity, water, telephone and cable.
Maintenance and Upkeep You will also have to cover the cost of painting, roof repairs, electrical and plumbing, walks and driveway, lawn care and snow removal. A well-maintained property helps to preserve your home’s market value, enhances the neighbourhood and, depending on the kind of renovations you make could add to the worth of your property.
This latest show we are featuring is the TRUSTED SASKATOON PERSONAL FINANCE SHOW All of the questions on the show have been submitted by our wonderful Trusted Saskatoon Facebook Fans and one lucky fans question was chosen by Brent to win the Prize package submitted by the 3 Trusted Businesses worth over $350
Your Mortgage Now : $100.00 gift certificate that can be used at any of the Trusted Saskatoon Partners!
It can be very beneficial to buy a home you can afford sooner rather than later. A home allows you to build equity and with every mortgage payment you make each month, you are building equity in a place of your own – unlike a rent payment.
Equity is the difference between the value of a home and your outstanding mortgage balance. The longer you stay in your home (and the more mortgage payments you make), the more equity you’ll have. Unlike most things you buy, a home will almost certainly increase in value over time – which builds even more equity.
Once you’re a homeowner, the payoff can be great. As the equity in your home grows, your financial flexibility also increases. Think of it as an extra source of financing for when the unexpected happens. An added benefit of borrowing money against the equity in your home, is it usually comes with a lower interest rate than other forms of credit, such as consumer loans, lines of credit and credit cards.
Here are some ways you can use the equity in your home:
Pay off other debts with higher interest rates (like credit card debt)
Renovate or repair your home – build a new room or put in a swimming pool
For important life events – a wedding, dream vacation or university tuition
Purchase a second home or vacation property
Emergencies – like a serious illness
Investing in a home can have a significant payoff over time. And the sooner you begin, the sooner you’ll start building equity.
Purchasing your first home is one of the most exciting experiences you will have in your life, and is one of the largest purchases you will ever make. The act of homebuying involves considerable sacrifice in order to save up for the deposit and finding a home to suit your needs. While everyone is generally on a different path, knowing what the average first-time homebuyer in Canada looks like can certainly help in knowing whether you are ahead of the game or slightly behind.
The Average First-Time Homebuyer in Canada
If you are in your twenties, thinking about homeownership should definitely be something on your mind. While it may not be something you can afford to do for a number of years, starting to plan immediately will help you. The average first-time homebuyer in Canada has three unique characteristics:
They are generally in their late 20s. In a study conducted by BMO in 2013, which surveyed 2000 first-time homebuyers, the average homebuyer was determined to be about 29 years old.
They buy a home valued at $316,100 on average. This number is different in major cities, such as Vancouver where the average is $506,500, Toronto at $408,300, Calgary at $363,400 and in Montreal where the cost is less than the national average at $237,900.
On average, a first-time homebuyer in Canada has $50,576 to put towards their down payment. This means that the average homebuyer has about 16% of the cost of the home, meaning they need to insure their mortgages with an insurer like Genworth (as mortgage insurance is required when a buyer has less than a 20% down payment).
The Average First-Time Homebuyer by Province
Homebuyers are vastly different based on the province they live in. The average home prices compared to the average amount spent by first-time homebuyers in a province helps to illustrate the cost of living and affordability in each of Canada’s provincial regions.
The average home in Atlantic Canada is $212,622, while the average first-time homebuyer spends $204,400.
The average home in Quebec is $263,661 while the average first-time homebuyer spends $222,300.
The average home in Ontario is $423,691, while the average first-time homebuyer spends $358,400.
The average home in Manitoba and Saskatchewan is $275,104 while the average first-time homebuyer spends $226,100.
The average home in Alberta is $407,540, while the average first-time homebuyer spends $364,700.
The average home in British Columbia is $611,688 while the average first-time homebuyer spends $430,300.
Other First-Time Homebuyer Statistics
The study also found out some interesting statistics related to first-time homebuyers.
About one third (30%) of all first-time homebuyers are expecting some assistance from their parents or other members of their family with their purchase. In both Montreal and Vancouver, these numbers are significantly higher at about 40%.
60 per cent of potential first-time homebuyers have had to delay their plans to buy, with close to 40 per cent of those people saying that the increasing cost of real estate has been the main reason for the delay.
Most first-time homebuyers (60%) set a fixed budget with a maximum amount they would want to spend on their home, but a third of them would be willing to spend more if they found a dream house outside of their set budget.
The question you need to pose to yourself is – how prepared are you? If you already have a larger deposit saved, perhaps you can invest in a slightly better property. If you are behind the average, consider services like Genworth’s down payment options.
Source: Genworth. Statistics for this post derived from BMO First-time Homebuyers Report unless otherwise stated. The poll was conducted by Pollara between January 24th and March 6th, 2014. 513 first-time Canadian homebuyers 18 years of age and older were polled. As a guideline, a probability sample of this size would yield results accurate to ± 4.3%, 19 times out of 20.
With house prices rising, it can difficult to afford a home on your own. You and a friend might be in the same situation and feel that if you pool your resources, you can invest in a home instead of throwing your money away by paying rent. What all parties have to realize is that this is a business partnership and should be treated as such.
What is involved with Buying a House With a Friend
Before you buy, it is important to look at the big picture and answer these questions:
Are my friends in a stable financial situation? Can they afford to split mortgage payments, utilities and come up with their share of a down payment? Ask them straight out, to avoid any issues in the future.
Do we share the same values? Are you both neat freaks? Couch potatoes? This can lead to tension as unlike a traditional business you are living with each other. People are used to doing things a certain way, are you ready to compromise?
Does everyone agree that this is an investment? Eventually, people’s lives change, they meet someone, relocate for a job. Have you talked about what will happen to the property when one person inevitably needs to sell their share?
Now that you have decided that this deal is going to work, you have to look at getting a mortgage. Is everyone involved going to be listed on the mortgage? All parties will have their credit ratings looked at and generally the person with the lowest credit rating will set the bar as to what a mortgage will be approved for.
After all of these questions have been answered and you have decided to go forward it is recommended that you find a lawyer. Once again, treat this investment as a business arrangement. Sit down with legal council and have a written agreement compiled that includes things such as:
Who will cover the down payment, property taxes, bills, and repairs when they are needed.
What will happen to the home if one of the owners is killed or incapacitated.
When can someone sell or leave the partnership? Do they need to give notice? Can the other partners buy out their share?
Sitting down with a lawyer will make sure that everyone fully understands how situations will be handled as they come up.
The last thing you may want to talk to your new business partner about are the house rules. Set out guidelines regarding pets, parties, noise and guests.
Purchasing a home with a friend can be an excellent way to start building your equity. As long as all of the people involved have been upfront with each other, there should be no surprises along the way to jeopardize the partnership. Let us help you when it is time to apply for that mortgage. We are here to answer any other questions that you may have when planning on buying a home with friends.
You have just found the home of your dreams and can’t wait to make an offer but you still have your own home to sell. There are options as to what you can do so that you don’t miss out on this opportunity, depending on your situation.
What is Bridge-Financing
One of those options is called bridge financing, and it is useful when a person needs funds to close the deal on a new home but have not closed the sale on their current home. This option can be expensive if you are not in a position of having a lot of money saved but can also be worth it as a short-term solution. Bridge financing usually carries a higher borrowing rate than your traditional mortgage (ex. prime + 1 or 2%). But remember, this loan should be paid in full in only a few days or weeks which means your expenses could range from hundreds to a couple of thousand dollars depending on the amount borrowed.
Not all banks allow for bridge financing and you should check into this before adding this to your options. If this sounds like an option you can afford, you should also keep in mind the costs of having to carry two mortgages, property taxes, home insurance and utilities on both properties as well as the temporary bridge loan. The only problem that could arise in this situation is if the sale of your house falls through and you have to deal with all of these expenses on a long-term basis.
With all of this in mind, bridge financing can still be the best way to deal with two different closings that don’t match up. If this is something that might work for you please contact us so that we can help you make that decision or find an option that will work for you.