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Why were so many borrowers renewing with the same lender last year?


 
by Neil Sharma 16 Aug 2018

According to a Canada Mortgage and Housing Corporation analysis, mortgage renewals with different lenders in Toronto declined dramatically in 2017 compared to the year before.

Tania Bourassa-Ochoa, a senior economic researcher with CMHC, theorizes that the 25.7% decline can be attributed to the B-20 rule changes in 2016.

“One of the reasons that could partially explain this is the mortgage rule changes in 2016,” Bourassa-Ochoa told MortgageBrokerNews.ca. “There was the stress test mortgages had to go through, but the problem is we’re not able to confirm this because we’re unable to observe the number of renewals with the same lenders. It’s hard to know if it’s really because of that.

“When you look at all of the major markets and you see the two most expensive markets in Toronto and Vancouver, that’s where the largest declines of renewals with different lenders was observed.”

While it is difficult to discount the role stress testing mortgages play in cooling activity—as well as the fact that lenders aren’t competitive with renewal rates—there could be another explanation for why so many borrowers decided to remain with their lenders.

“Historically speaking, lenders aren’t that competitive on renewal, especially if you look at 2016 to 2017 when they would come out with a subpar rate at best,” said Benjamin Sammut, a Mortgage Architects broker. “The only thing I can think of is they’re upping their game and starting to be a little more competitive in what they’re offering in terms of rate, and they’re probably contacting their clients a little earlier. What used to be 90 days out has turned into a 180 days out. We’ve even heard of instances where clients are being told a year in advance that they could do an early renewal.”

The decline in renewals with different lenders is confounding, though, because lenders don’t incent borrowers to stay with them.

“If they’re incentivized somewhere else and they can get the exact same product somewhere else, then they’re usually more inclined to do that,” said Sammut. “It’s like looking at Bell and Rogers: They’re the exact same product, but it’s a question of who’s going to screw you less.”

The CMHC analysis of Equifax data also determined that refinances declined in 2017 compared with a year earlier, and it’s likely because fewer homeowners were willing to leverage their properties, which is consistent with the decelerated price growth in some of the country’s major markets at the time.

“The only explanation I can think of is you have borrowers seeing a stricter environment,” said Bourassa-Ochoa.

“People wanted to see what would happen because of the threat of rate increases and stricter and stricter regulation. They probably just wanted to hold off, and that included refinances for debt consolidation, renovations to their home or changing lenders and increasing the amount borrowed.”
 
Related stories: CMHC pushing for stricter fraud detection mechanisms

Average monthly payments now much higher compared to last year


 
by Ephraim Vecina 14 Aug 2018 MBN

Paying off the debt accumulated during the long afternoon of rock-bottom interest rates would likely be the biggest challenge for Canadian borrowers in the next few years, according to a joint analysis by Equifax and the Canada Mortgage and Housing Corporation.

A combination of rising interest rates and the larger debt loads of recent years have pushed average monthly housing payments much higher in Q1 2018 compared to Q4 2017, Better Dwelling reported.

The CMHC and Equifax warned that this is just the beginning as interest rate growth is trending towards more normal levels, coming off from the record lows of the past few years.

This has become especially apparent in red-hot Toronto and Vancouver. The average monthly mortgage payment in Toronto reached $1,662 in Q1, representing a 6.4% increase from the last quarter. In Vancouver, this figure was $1,794 per month at the end of the first quarter, up 6.53% from Q4 2017.

To compare, Montreal – acknowledged as an up-and-coming market in terms of housing prices – saw the average payment touch $1,060 in Q1, up 2.51% from the quarter prior.

Read more: Higher rates to choke indebted households further

Payments for home equity lines of credit have also seen a market rise in the first quarter of the year. In fact, their rate of growth has been nearly double that of monthly mortgage dues.

In Toronto, borrowers owed an average monthly HELOC payment of $518 in Q1 2018, up 12.85% from the previous quarter. HELOC holders in Vancouver made an average monthly payment of $594 in Q1, up 10.82% from Q4 2017.

To compare, Montreal’s HELOC holders paid an average of $582 monthly in Q1, up 5.82% from the quarter prior.

Reaction to CMHC’s Clampdown on Mortgage Fraud


 

Dan Yurman AUGUST 13, 2018 Canadian Mortgage Trends

Last month the Canadian Mortgage and Housing Corporation (CMHC) formally asked the Canada Revenue Agency to take a more active role in verifying income claimed on mortgage applications in an effort to clamp down on mortgage fraud.

The CMHC says the move is necessary given that “the industry’s current detection tools have not kept pace with the increasing sophistication of threat we face,” according to its plan. Data backs this up, with a 2017 Equifax study finding that a full 13% of Canadians would be comfortable lying in order to get a mortgage approval. The study also noted a 52% rise in suspected fraudulent mortgages since 2013.

How we got here

 
Back in 2008, when the financial crisis hit the United States, Canada was in comparatively good shape because of the solid infrastructure in place to manage the mortgage system.

In 1938, the Federal Government passed the National Housing Act “to promote housing affordability and choice; to facilitate access to, and competition and efficiency in the provision of, housing finance; to protect the availability of adequate funding for housing at low cost; and generally to contribute to the well-being of the housing sector in the national economy.”

Seven years later, in 1945, the CMHC was formed to administer the National Housing Act and provide mandatory mortgage insurance. One of its mandates was to clearly define the amortization times and mandatory down payment amounts on mortgages it would insure, carefully balancing the risks while still making homeownership possible. And, for the most part, it did a good job.

But then in 2006, amid the run on housing prices in the U.S., the CMHC started offering mortgage insurance on 40-year terms. Critics argued this would lead to too many unqualified borrowers getting mortgages, which would jeopardize the system.

Government rule changes over the years slowly reduced the maximum amortization for insured mortgages to a maximum of 25 years.

While this rollback was good for the market, and ultimately better for borrowers in terms of interest savings, it’s made qualifying for a mortgage much more difficult, particularly given the rapid rise in home prices.
And that’s led to desperate homebuyers increasingly misrepresenting incomes on mortgage applications in order to sneak under the debt ratio requirements.

The CRA Solution: Independent Income Verification

 
As a result of the CMHC request, the CRA says it is now exploring ways to improve how it delivers taxpayer-specific information in a secure manner, including securely sharing tax information with financial institutions contingent on client consent.

Marshall Tully, a mortgage broker in Toronto, supports the move by the CRA.

“Fraudulent income documents can be easily created for salaried employees and self-employed alike,” says Tully.

“The mortgage application process can be extremely document heavy. This creates opportunities for fraud. Giving lenders direct access to CRA data will allow for accuracy and speed in confirming income.”

Paul Taylor, President and CEO at Mortgage Professionals Canada, agrees.

“It’s difficult to argue against any method that would provide additional verification,” says Taylor. He went on to quell the fears anyone might have about CRA involvement. “CRA will be very protective of its data; it is sensitive financial information, so whether it is provided directly or through a third party, I expect (stringent) requirements for borrower authorization to access the information.”

But not everyone is behind CMHC’s request for direct involvement from the CRA.

Rena Malkah, owner of CYR Funding, has been a mortgage broker for 44 years and thinks this is an issue best left to underwriters.

“Their job is to verify the claims. If they can’t they should be fired and replaced by someone who can,” she said. She adds that credit rating is more important than income verification anyway. “If someone has a high credit rating, it shouldn’t matter what their income is. If they fight and scrap for under-the-table money to pay their bills on time, then it should be of no interest to the insurance company where the money comes from. And besides, involving CRA opens more people up to audit.”

Helen S. is a 61-year-old retired public accountant from Oakville, and the mother of a 26-year-old, and she agrees with Malkah. Her son earns just under $40,000 a year as a baker and she wants him to buy a home. She’s prepared to pay a percentage of the mortgage payments but she wants the mortgage in his name.

“How I choose to set my son up for success is none of CRA’s business. I know he won’t default,” she says. “My broker knows too. The CRA doesn’t have to be involved. We already give them enough money.”

Related posts: CMHC pushing for stricter fraud detection mechanisms

Mortgage brokers vs. banks: the pros and cons


 
By TRACY HANES Special to the Star

If you’re looking for a mortgage on a home purchase — or to renew one on a home you already own — is a mortgage broker or a bank your best option?

The main difference is a bank mortgage officer represents only the products their institution offers, while a mortgage broker is an intermediary who works with multiple lenders and is paid a referral fee by the lenders. Mortgage brokers are regulated in Ontario by the Financial Services Commission and require a licence.

While traditional banks still are used for mortgages by the majority of homeowners, “use of brokers is trending upward,” notes Monica Guido, manager of client relations with Canada Mortgage and Housing Corp. “It’s higher among first-time buyers. Finding a deal, or the desire to get the best rate, is the key reason people use a broker.”
Because mortgage brokers work with many lenders, including major banks, small lenders, insurance and trust companies, and private funds, they often have access to a better rate.

In 2017, 39 per cent of homeowners used a broker to arrange their mortgage, up from 33 per cent in 2016, according to CMHC. On average, consumers consult with 4.5 mortgage professionals when seeking a home loan, including 2.4 lenders and 2.1 mortgage brokers.

“There have been an awful lot of changes in the last 24 months with mortgage regulations and the interest rate environment, and it’s getting more complicated,” says Paul Taylor, the CEO and president of Mortgage Professionals Canada, a national mortgage industry association. “There’s greater need for expert or independent advice, and that’s why more people are coming to mortgage brokers.”

He also finds most broker clients are first-time buyers; he says it may be because they have less reverence for large institutions than their parents do. It may also have to do with how mortgage services are being marketed: Guido says that 59 per cent of mortgage brokers are leveraging technology and social media to reach clients, which appeals to younger consumers, while only 17 per cent of conventional lenders are.

Some of the advantages for both banks and brokers:

Banks

  • Customer may already have a relationship with a bank and its staff.
  • Can supply a wider financial view and give information about a range of financial products — but a bank loans officer might not have specialized mortgage knowledge.
  • May offer some efficiencies of the approval process since the bank may already know a client’s account balances, credit card history, investments, etc.
  • Can provide peace of mind that the institution is large and stable enough to weather periods of financial instability.
  • Banks are required to meet federal underwriting guidelines.

 
Mortgage brokers

  • Offers a one-stop shop; clients fill out one application and don’t seek out multiple lenders’ quotes themselves.
  • Often are able to get better rates than offered by major banks.
  • Are mortgage specialists and are knowledgeable about what different lenders have to offer.
  • May be able to arrange a mortgage for those having trouble getting approved by a bank, such as self-employed people and those with poor credit histories.

 
Whether you deal with a bank or with a mortgage broker, the down payment rules are the same: a 5 per cent down payment for a house priced less than $500,000. If the purchase price is $500,000 to $999,999, you’ll need 5 per cent for the first $500,000 and 10 per cent for any amount over $500,000. If buying a property of $1 million or more, you’ll need 20 per cent down. For all down payments of less than 20 per cent, you’ll need mortgage loan insurance, offered by providers such as CMHC.

Taylor says a mortgage broker should discuss with you your personal financial and lifestyle situation, whether you plan to stay in a house for a long time or may have to move in a few years (in that case, you may want a mortgage that is portable). The broker should provide details on various lenders, discuss pros and cons of fixed versus variable rates and point out any cancellation or pre-payment policies.

“Make sure the individual is licensed in the respective province you are in,” advises Taylor. “Each province has its own registry and standard of education.”

While credit unions and small lenders are not federally regulated and not required to adhere to some of the underwriting guidelines, Taylor says most of the time they are forced to comply anyway. Many smaller lenders or “monolines” that only do mortgages often sell their portfolios to larger institutions that exercise significant oversight.

CMHC’s Guido notes that the current, cooler housing market in Ontario and the GTA is giving homebuyers more breathing room.

“There is less urgency for prospective buyers to act hastily,” Guido says. “There’s an opportunity to ask around and do research. Ask your real estate agent or lawyer for their references and recommendations.

“Consumers are looking for options and like to receive offers from brokers and financial institutions,” she adds.


 
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Condo segment might experience a boomer surge in the near future

by Ephraim Vecina 09 Aug 2018 MBN

A significant proportion of Canada’s baby boomers are considering condominiums as their primary choice of residence upon retirement, according to the newly released Royal LePage Boomer Trends Survey.

When asked about their home purchase plans for the next 5 years, 32% of respondents indicated a desire to get condos, while 10% expressed a preference for semi-detached/town homes. Meanwhile, 5% of boomers want recreational properties, and nearly half (45%) said that they are most likely to purchase detached homes.

In B.C., 42% of boomers polled stated that they are planning to use their current homes to fund condo purchases that would serve as their next homes. 37% also said that they would be willing to move to more affordable locales for their purchases.

“More and more, we’re seeing baby boomers in British Columbia downsizing from a detached home to a condominium,” Royal LePage Northstar Realty managing broker Michael Trites said. “Increasingly, they are transitioning into condos to unlock some of the equity they have built up in their homes, while gaining more flexibility as their health and lifestyle preferences change.”

On the other hand, 46% of Ontario boomers said that they would go for condos as their next homes. 40% expressed readiness to move to new markets in search for greater affordability, with 32% saying that they are willing to move more than an hour away from their current locations.

“Boomers in Ontario are looking to reduce expenses as they approach retirement,” Royal LePage Your Community Realty broker Caroline Baile explained. “They are looking to transition into a lifestyle that gives them more freedom to pursue other activities without having to deal with time-consuming upkeep and unexpected repairs.”

Meanwhile, Quebec’s boomers are the most likely to be satisfied with their current living situation, according to the poll. Only 11% said that they are planning new home purchases in the next half-decade, and fully 62% preferred to renovate than buy a new residence. They are also the most likely to stay put in their current locations, with 77% saying that they are not planning to move to a new market upon retirement.

“When boomers in Quebec sell their property, it’s normally for one of two reasons: to pull out the equity to enjoy life or to help their children purchase a home,” Royal LePage Tendance broker Pierre Lafond said. “Those looking to rent a property choose that lifestyle to avoid the potential hassle of being a property owner. If they are looking to downsize, they normally ‘trade up’ into a more high-end house or condo.”


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Survey reveals seniors’ feelings about selling their homes


 
by Neil Sharma 02 Aug 2018 MBN

According to a survey conducted by Home Equity Bank in tandem with Ipsos, 93% of seniors want to age in place.

“The older the people that we surveyed, the more they want to stay in their homes,” said Yvonne Ziomecki, Home Equity’s executive vice president of marketing and sales. “They want to age in place. Ninety-three percent of homeowners 65+ felt it was important to stay in their homes in retirement.”

The findings indicate that perceived home comfort increases with age. By contrast, of survey participants aged 25 to 34, only half felt it was important to stay in their homes during retirement.

As surely every broker knows, Home Equity offers the CHIP Reverse Mortgage, and one of the reasons for its popular is seniors’ desires to remain in the homes in which they retire.

“Our product is all about letting people age in place and retire in their home,” said Ziomecki. “When we asked them about independence, 69% of people 65 and over said staying in their home points to the importance of independence. They don’t want to live in a facility or with their kids. They want to stay close to their family, friends, and communities.”

With the recent home equity surge in cities like Vancouver and Toronto, realtors knocking on homeowners’ doors and imploring them to sell are a familiar sight. All too often, those homeowners are seniors.

“Now that the real estate market has exploded, are they willing to cash in or do they want to stay in their homes? To see 93% want to stay in their homes, it tells us nothing has changed except that their house is worth more and they can access more equity, which is our value proposition,” said Ziomecki.

Darlene Vilas, a mortgage broker with MOS MortgageOne Solutions who specializes in reverse mortgages, says it is important for seniors to realize that there are options available to them other than moving out of a home against their will.

“Somebody who’s elderly and realized a great increase in their home’s value should never feel pressure to sell when they can tap into the equity in their home through a product like a reverse mortgage,” said Vilas. “The seniors I deal with don’t want to sell—they don’t want to leave their neighbourhoods, their communities. They’re comfortable, and often they’re close to family, which they need as they get older, so if they’re feeling pressure from realtors or builders or investors to liquidate, that’s why this product needs the attention.”
 
Related stories: ‘Lifestyle mortgages’ for savvy seniors, Retirement ain’t what it used to be

How to Recognize and Prevent Financial Elder Abuse


 

Life & Money

 
Financial abuse in particular is a growing problem in Canada. According to a Vancity report, 41% of elderly adults have experienced some form of financial abuse.

The following article first appeared on RBC Wealth Management, Research and InsightsClick here.

Financial abuse of the elderly isn’t often talked about, but it is a concern for many seniors. Here are ways to help protect yourself or your loved ones.

As a wills and estate lawyer, Bianca Krueger has seen her fair share of family conflicts and money-related arguments, but she says there’s nothing more heartbreaking than when a child takes advantage of an elderly parent. Several years ago she received a call from an 80-something client who said she wanted to change her will. She asked to meet away from her home — and Krueger soon understood why. The day of the scheduled meeting, a man called and spoke to her paralegal to cancel the appointment. Krueger thought that very strange, so she visited the client’s apartment regardless — where the woman’s son physically attempted to block Krueger from entering.

The elderly client wanted to appoint an attorney and change her will so that she could be assured that she was looked after in the future. The middle-aged son, had a severe drinking problem, was verbally demeaning to his mother, and he wanted to keep the condo to himself upon her death. He was also under the mistaken belief that as the current executor of her will, he had some power to block her decision-making ability during her lifetime.

In the end, Krueger succeeded in helping the client with her estate and incapacity planning with the help of her other children, but the incident stuck with her. Unfortunately, these stories are more common than many Canadians realize.

Financial abuse in particular is a growing problem in Canada. According to a 2014 Vancity report, which surveyed seniors in the Vancouver and lower mainland regions, 41% of elderly adults have experienced some form of financial abuse. With an expected 98% increase in seniors over age 85in the next 20 years, that number is likely to rise. While there are other types of elder abuse, financial exploitation is the most common, with 62.5% of cases of abuse being money-related, according to the Ontario Human Rights Commission.

Understand What Financial Elder Abuse Looks Like

Elder abuse consists of more than just fraud targeting unsuspecting seniors. Financial elder abuse can also be a case of family members, caregivers or friends taking advantage of an elderly person’s finances. It could be a family member, a service provider that the older adult has entrusted, or it could be a neighbour or a friend.

Financial abuse can take many forms, from the seemingly innocent, like a child charging their groceries to their parent’s credit card, to the more deliberate, such as a new boyfriend trying to get included in a will. Often elderly people don’t realize they’re being taken advantage of until it’s too late. “It may not start with some big request,” notes Krueger.

The challenge with elder abuse — and a reason why Statistics Canada says that 96% of abuse experienced by older adults goes hidden or undetected — is that it’s often difficult to ascertain. It’s an increasingly grey area. When is it assisting with estate planning, and when is it stealing?

Spot the Red Flags: New “friends” Or Changes in Spending Patterns

It’s not always easy to see financial abuse of an elder as it’s happening. More often, cases are discovered after large portions of one’s savings have gone missing. But there are warning signs that loved ones should watch for. One big red flag is the new “friend.”

Suddenly, a new friend, companion, or romantic interest appears on the scene, then begins accompanying the senior to meetings with lawyers and financial advisors. Family members and loved ones should determine who that person is and question why he or she should be involved. Also be aware of any unusual purchases, such as the senior suddenly shopping online when it’s never been their habit. In such cases, it’s possible that someone else, a child or the new “friend,” is shopping with that senior’s credit card.

Social isolation is another red flag. If the senior is spending less time with their family or established social networks, and too much time with one person, it could be cause for concern. Krueger recommends that the elderly person in question stay involved in their community and maintain their social circle. Loved ones should be on the lookout for any sudden changes in social activities and patterns of behaviour.

Protect Your Loved One by Establishing Financial Power of Attorney

The best way to prevent elder abuse is to put plans in place early on. Begin by appointing the proper financial power of attorney, or POA, which is distinct from a health-related POA. By default, many people appoint the senior’s child as power of attorney. But in many cases, one’s offspring may not be ideally positioned to oversee the parent’s finances.

What if the child must decide between expensive around-the-clock homecare and a less expensive retirement home? Can a child objectively make the best choice, when one option may very well cut into their inheritance? And if the child is not adept at managing their own finances, should they be in charge of their parent’s finances?

It’s not easy to think critically about family members, but it’s important that the senior fully understand their relationship with the individual who has power of attorney, and that person’s relationship to others. Krueger has seen many cases of children disagreeing as to what is in the parent’s best interests. Sometimes, families end up making mistakes simply because siblings live in a different city and they’re not physically present.

You need to be realistic about your family situation. This means striving to be objective when it comes to making decisions that can affect multiple parties and extended families. That’s where having a trusted professional may help bring some the clarity and independence to make the best decision for the elder. Krueger recommends three criteria for choosing a private person to act under a financial power of attorney. The attorney should be trustworthy, live in the same geographic area, and most of all, he or she should have the senior’s best interests at heart. Krueger believes the best way to mitigate family issues or tensions is to appoint a corporate attorney, who can oversee spending, asset allocation, distributions to family members and more. A corporate attorney, for example, is not influenced by people’s opinions and is held to a very high standard.

Seniors may want to offer guidance to their power of attorney on how they would like to see their money spent. For instance, if the grandparent wants to pay for a grandchild’s education, they should articulate this specifically and have it documented.

Educate Yourself and Your Loved Ones about All the Options

Last but not least, education is key. “Boomers and seniors who are either approaching retirement or living in retirement must understand their financial goals, their sources of income, how to manage their current finances, and what to be aware of when it comes to potential financial abuse,” says David Agnew, CEO of RBC Wealth Management Canada.

Financial abuse of elders isn’t going to go away any time soon, but people can better protect themselves and their loved ones by being vigilant and well-informed — and recognizing that it’s not uncommon for something — or someone — to go awry. No one wants to believe that someone they love and trust would be capable of doing this. But it happens.

Canada’s seniors prefer to stay put in their homes – poll


 
by Ephraim Vecina 25 Jul 2018 MBN

93% of Canadian home owners aged 65 and over expressed a belief that it is important for them to live in their current homes in their retirement years, according to a recent poll conducted by Ipsos on behalf of HomeEquity Bank.

The survey – which was conducted between June 15 and June 18, 2018 – also found that in stark contrast to Canadian seniors’ preferences, only 55% of respondents aged 25-34 said that it’s important for them to stay in their homes when retired.

69% of senior home owners in Canada wish not to move away during retirement to maintain a sense of independence. Meanwhile, 51% said that they want to stay close to family, friends, or their communities, and 40% pointed at emotional attachments and memories as their motivation for staying put.

In addition, Ipsos observed a positive correlation between age and the perceived importance of home comforts, progressively strengthening among Canadians aged 35-44 (68%), 45-54 (74%), and 55-64 (79%).

Real estate professionals were among the leading sources of inquiries among senior home owners, with 17% of Canadians aged 55 and over (and 24% of those aged 75+) saying that realtors have approached them to gauge interest in selling and downsizing. Other sources of inquiries were friends and/or other family members (6%), adult children (3%), banks and/or financial advisors (1%), and neighbors (1%).

However, a majority of homeowners aged 55 and over (76%) said that they haven’t been approached for inquiries yet.

Five Money Vows to Make Before Tying the Knot


 

Life & Money

 

How to Prepare Financially for Marriage

But even more important than your color scheme or caterer are the decisions you and your future spouse make now about marriage and money.

“Money issues” were cited among the top three motivators for marriage breakups in a survey of financial analysts specializing in divorce.

So, as you plan the exciting details of your wedding day, set aside time with your partner to talk about your future together keeping these financial planning guidelines in mind.

Share Your Financial Values and Goals

What short-term and long-term financial goals do each of you have? Donating regularly to a charity or important cause may be a priority for one of you, while the other dreams of buying into a high-end neighborhood and taking a luxury vacation every year. Write down your priorities separately, then compare lists and discuss where your goals overlap and where you can compromise.

Many marriages don’t survive the wealth-planning and building phases because only one, or neither, of the spouses is totally committed to a shared wealth management plan.

Assess Your Individual Financial Situations

Before you combine your money, get your own house in order. No one wants to start a life together with an unhappy revelation about past financial troubles or debt. How much do you have in monthly income and your savings account (if you have one)? What’s the total on your credit card or student loan debt? What are your monthly expenses, and how will they change once you are married?

With so many young people coming out of school with a lot of student debt, it’s important to decide together how you’ll deal with it. Is it going to be “his or hers” debt, or “our” debt?

Make a Savings Plan That You Both Agree on

It takes discipline to postpone gratification to get to a more certain future.

“’The Millennial Marriage Survival Guide,’” should it ever be written, should start with: Save a minimum of 10 percent of every dollar you earn in a long-term, untouchable account. You can get more detailed if you like, such as max-funding your Retirement Plan at work if you have one, or max-funding your TFSA or RRSP, just know that it is the conceptual commitment that matters most.

Discuss savings and investing options that fit your current financial situation, and agree upon monthly contribution amounts. Doing so establishes savings expectations and ensures you and your spouse are able to properly plan to achieve your financial goals.

Have the Tough Conversations

The two most financially devastating life events may be divorces and unexpected deaths. Even when you’re first starting out, it’s important to think about protecting your assets, particularly if you come into a marriage with substantial resources.

Most people understandably don’t want to think about those unfortunate circumstances coming to pass, so they don’t talk about them. But doing so — whether by having a will or trust drawn up or a pre-nuptial agreement in place — can be lifesaving in a worst-case scenario.

At least have a power of attorney filled out, so someone else can make decisions on your behalf if you’re unable to. We’re all mortal and we never know what can happen.

Be Transparent With Your Spending Habits

People getting married at older ages have pre-existing personal finances in place, fine-tuned to each spouse’s personal lifestyle preferences. Abandoning the freedom, and privacy, of your personal financial situation can be difficult, but is important if a marriage is to succeed. You must be willing to open the books and share all the details with your partner. Maybe have a regular “money date” to talk about finances once a quarter or twice a year. It’s like dieting or exercise. Once you establish a routine it gets much easier.

Rebound imminent, claims report


 
by Neil Sharma 18 Jul 2018 MBN

According to a report by Altus Group, the preponderant reason for the languid housing market this year has been the absence of first-time buyers—but they’ll be back soon and the market will resultantly recover.

“With all the policy changes we’ve had and additional stress testing, they have knocked many first-time buyers out of the market for a while, but part of what they’re doing is saving money. They’ll be back,” said Patricia Arsenault, vice president of research and consulting services at Altus Group.

“Particularly among younger renters; they’re inclined to buy homes. Because of their ability at the moment, they’re saving longer and tapping resources from parents to help them out, but they’ll be back in the short-term. There’s nothing out there that says they don’t want to own homes anymore.”

Arsenault added that, by autumn, housing sales will markedly improve.

“People are saving for down payments,” she said. “Savings rates are up in Canada and that money is being used for better down payments.”

The Altus Group Housing Report furthermore elucidates how instrumental first-time homebuyers are to the health of the Canadian real estate market. They account for somewhere around half of all housing sales, but, unlike years past, they have been forced to the sidelines in 2018.

Given the housing market’s interconnectedness, fewer first-time buyers occlude other buyers from moving up the housing ladder.

“The important role that first-time buyers play is that if I’m a repeat buyer trying to move up to something more expensive, I need somebody to buy my house,” said Arsenault. “If first-time buyers aren’t there, there’s nobody to buy my house, so they make the world go around, if you want to put it that way.”

Benjamin Sammut, a Mortgage Architects broker, says first-time buyers are discouraged by stifling regulation and relentless media reports about the latest blow to affordability. Presently in the dead of summer when the market is typically slow, and coupled with buyer fatigue, Sammut expects the fall market to rebound.

He also tries to inculcate in his younger clients other ways to think about homeownership.

“You don’t need to own where you live and you don’t need to live where you own,” said Sammut.

“That’s what I’m telling my younger first-time buyers. It’s going to be unique to each individual’s situation, but if you can afford to buy something in a very healthy rental market and you can afford to rent where you want to live, then why not rent the lifestyle and just own a piece of real estate? You don’t necessarily need to own the house and hold off homeownership and real estate ownership until then.”
 
Related stories:
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  • 2.99%
  • 2 YEARS
  • 3.24%
  • 3.24%
  • 3 YEARS
  • 3.44%
  • 3.34%
  • 4 YEARS
  • 3.89%
  • 3.09%
  • 5 YEARS
  • 4.94%
  • 3.29%
  • 7 YEARS
  • 5.30%
  • 3.39%
  • 10 YEARS
  • 6.10%
  • 3.64%

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