Category Archives: First Time Home Owner

Should You Trust Your Bank?

When it comes to financial advice, including information on the best mortgage rates, who do you turn to? According to a survey released by the Bank of Montreal last Friday, Canadian’s are more likely to turn to their financial institution with money problems than anywhere else. This includes friends, family members, financial advisors and mortgage brokers. Even in the age of social media, younger home hunters and investors admit that the bank is their number one source for financial advice.

But is the bank really the best place to go for unbiased information?

There’s no denying that Canada’s big six banks deserve a pat on the back for their marketing prowess. But it’s important to recognize it for what it is – smoke and mirrors. Banks position themselves as partners in the pursuit for financial success, but at the end of the day that’s not necessarily the truth. While banks aren’t out to suck you dry, they certainly are out to make a profit. At the end of the day, banks are driven to rake in profits in order to please shareholders. Sadly, this is often at the expense of the customer. Continue reading →

Housing Slow Down Has Started

The future of Canada’s housing market rests in the hands of the nation’s buyers, or at least that’s what the latest housing stats would have us believe. Signs are everywhere that Canada’s once red-hot real estate market is about to freeze over, thanks to a combination of tighter mortgage rules and increasing consumer debt levels. Not only are home sales grinding to a hault, the long-booming prices are finally starting to drop.

Granted, sales always slow down as the seasons change and the temperature drops. Only time will tell whether or not spring will bring a much needed renewal to a reeling market. Continue reading →

How Age is Impacting the Housing Market

It used to be that buying a home was a solid investment in your retirement. Simply purchase a fixer-upper, restore it to it’s former glory, incorporate some modern amenities, and presto-changeo: 20 years from now you’ve got yourself a nice, big next egg. However, things have changed, leaving many mature homeowners facing a frustrating reality.

According to the Bank of Montreal, about a third of Baby Boomers plan to sell their home to fund their retirement. Unfortunately, the questions remains as to whether or not there will be enough buyers capable of purchasing these properties as more and more seniors begin to downsize. An oversupply of houses could ultimately result in a price plunge, leaving many retirees high and dry. Continue reading →

Could Interest Rates Go Lower?

Interest rates have no where to go but up, right?

Maybe, but maybe not. Bank of Canada governor Mark Carney signalled last Tuesday that he’s still looking to raise the cost of borrowing “over time,” however, it appears to be an empty threat. The overnight rate has remained unchanged for months as Canadian home hunters continue to take advantage of a stable 1 percent borrowing rate.

In fact, some lenders are even considering dropping their mortgage rates below the current record lows. Rob McLister, editor of Canadian Mortgage Trends was quoted in the Financial Post insisting there is “no question rates [could] go potentially lower.”

While the prime rate tracks the overnight lending rate, it doesn’t limit how low banks can actually go with their mortgage products. Many mortgage brokers are also willing to cut their commission in order to buy down rates as they compete against larger lending source. If you’re currently on the market for a great rate, consider this: there are plenty of fix-year, fixed-rate closed mortgages available at 2.99 percent. Continue reading →

Canadians More Cautious About Household Debt?

The Bank of Canada has been repeating warnings about dangerous household debt levels for months, however data released on Tuesday shows that people might finally be starting to get the message. The central bank noted that consumer spending has been “moderate” as of late, suggesting that Canada’s craving for credit could be beginning to subside.

The Bank of Canada’s third-quarter monetary report also touched on a new plan for interest rates, pushing back the timing of an increase, while at the same time warning that a boost could occur in order to dissuade individuals from taking on additional debt.

Tuesday’s release was the first time that Ottawa’s policy makers linked household debt to interest rates. According to the report, “imbalances in the household sector” has become a factor that could force an increase in the Bank of Canada’s current setting of one percent.  Continue reading →