Author Archives: Editor

New Barriers for First-time Home Buyers

It’s no secret that the residential real estate market relies on a steady stream of first-time home buyers. A constant and consistent demand from young buyers is what keeps housing prices from declining.

Unfortunately, new mortgage rules are making it harder for cash-strapped buyers to qualify for current real estate prices. In a logical economy, housing prices would have to drop in order for new home buyers to handle the restrictions. But as we all know, things are rarely rational when it comes to the economy. Continue reading →

Why You Need an Emergency Fund When Buying a Home

You wouldn’t go skydiving without a parachute, or walk across a tightrope without a safety net, yet thousands of people buy homes in Canada each year without an emergency fund safely tucked away in the bank. When you take out a mortgage with no savings, you’re flirting with disaster. An unexpected job loss, drop in income, home repair, medical situation or divorce could spring up out of nowhere, causing you irreversible financial strife. No one every expects this kind of misfortune, but that doesn’t mean you shouldn’t prepare for it. It’s always better to be safe than sorry, especially when it comes to your finances. A cushion of at least three months living expenses is just the start. Continue reading →

Bank Holds Overnight Rate at One Percent

The overnight rate held steady yesterday as the Bank of Canada announced that it would maintain its traget of 1 percent. This leaves the prime lending rate at 3 percent. It’s now been more than two years since the prime rate has increased, giving variable rate mortgage holders the upper hand on higher interest costs. Continue reading →

Canadian Housing Market at Tipping Point

According to economists at the Bank of Nova Scotia, Canada will soon boast a more than 70 percent homeownership rate. The question now is whether or not the nation’s housing market has reached the tipping point (the United States is believed to have cracked the same 70 percent threshold just before the housing bubble burst in 2008).

Growing concern over Canada’s seemingly out-of-control housing market has already prompted Ottawa to crack down on mortgage rules. These restrictions, which include limiting amortizations to 25 years, are designed to disuade cash-strapped Canadians from taking on mortgage debt that they can’t afford. What’s more, the Office of the Superintendent of Financial Institutions has also implemented new rules that will tighten up lending regulations at financial institutions. Continue reading →

Loophole May Make Credit Unions the Better Mortgage Option

New mortgage guidelines aimed at Canada’s sizzling real estate market might not be as ironclad as Finance Minister Mark Carney may have hoped. That’s because credit unions, which are provincially regulated, are not under the jurisdiction of the Office of the Superintendent of Financial Institutions (OSFI). This loophole may provide community credit unions with an important competitive advantage and borrowers with an attractive alternative to traditional lending sources. Continue reading →