Saving for a down payment on a home takes dedication, perseverance, and sacrifice. For many, it also takes a long, long time. According to a recent report from Rate Supermarket, come 2020 the average cost of a home in Canada will be $553,000. To accumulate a measly 5 percent down payment for such a home, recent graduates should expect to spend at least 12 years saving up. If you’re hoping to pack away 10 percent, prepare to squirrel away your savings for roughly 21 years. Continue reading
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Avoid Homebuyer’s Regret With These Tips
While buying a home is the biggest investment the average Canadian will ever make, many first-time home buyers still don’t take the time to perform sufficient financial due diligence before signing their offer to purchase. A recent survey commissioned by TD Canada Trust has found that the two biggest regrets include not saving for a larger down payment and not doing enough research into the actual costs of maintaining a home. Continue reading
Housing Market Cooling Across Canada
The Canadian housing market has begun to correct itself, or at least that’s what the numbers show. A combination of market fatigue, stricter mortgage rules and a decrease in property affordability are believed to be contributing to the long anticipated correction. Home sales fell 5.8 percent in August from July. Sales are down 8.9 percent year over year.
With that being said, Canadian home resale prices edged slightly higher in August over July numbers. According to the Teranet-National Bank Composite House Price Index, overall pries of repeat sale single-family homes climbed 0.2 percent in August from July.
This is the smallest August gain in 12 years. Falling prices were also recorded in three of 11 markets surveyed by the index. Continue reading
Questions to Help You Avoid Mortgage Penalties
Thinking about opting out of your fixed rate mortgage in order to take advantage of ultra low variable rates? Be careful! Interest rate differential (IRD) charges – commonly referred to as mortgage penalties – could leave a large dent in your wallet if you’re not careful.
Unfortunately, banks have historically made it nearly impossible to figure out just how expensive switching mortgages is. But that’s about the change. A new “voluntary” Code of Conduct has been implemented by the Department of Finance whereby banks are now required to provide their mortgage customers with clearer explanations of prepayment charge calculations, as well as provide calculators so that mortgage holders can estimate their own penalty estimates. Mortgage calculators can now be found on the official websites of the Bank of Montreal, CIBC, HSBC, ING Direct, Laurentian Bank, National Bank of Canada, Manulife Bank, Royal Bank, Scotiabank and TD Canada Trust. 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