A report from PricewaterhouseCoopers spotlights new trends in Canadian views on debt, as well as the impact of mortgage restrictions on the real estate market.
Data from The Tide Turns: Canadians, Debt and Retail Lending study shows that more Canadians are comfortable with the amount of debt they're carrying, and they're also more focused on reducing it. Of 1,228 Canadians surveyed, 57 percent felt their debt level was about right. This marks a decrease from 59 percent during the previous year.
Meanwhile, 66 percent of respondents indicated that they plan on reducing their debt this year. This represents a 3 percent increase from last year.
Additionally, Canadians remain optimistic regarding the economy and their own financial situations. More than half (55 percent) of respondents said they think the nation's economy will remain stable or grow. Nearly half (46 percent) believe their income will rise over the next five years. Continue reading
Affordability is a hot topic in Canada's residential real estate market. While rising home prices mean greater value for homeowners, they can also translate to difficulties for prospective homebuyers. After all, a more expensive home will require more financing, something that can lead to more debt and ultimately foreclosure if a borrower is unable to stay current on their loan.
Data from the Teranet-National Bank's house price index shows that despite a decline in sales, home prices have continued to rise throughout the country. Overall, on a year-over-year basis, home prices increased 2 percent during May. This follows a 2 percent gain during April. Continue reading
Whether you're looking to purchase a property or refinance a current mortgage, there's no shortage of options when it comes to obtaining home loans. While most Canadians may associate taking out a mortgage with a visit to their local financial institution, the rise of computers has made it easier than ever for individuals to obtain financing, oftentimes from the comfort of their homes.
Online lenders are typically broken up into three types. The first type technically isn't a lender, but a website that aggregates products from many different lenders, offering interested parties a chance to browse what's currently on offer, including mortgage rates.
The second type is the online counterpart to a financial institution borrowers can visit in real life. These include websites for banks and credit unions where borrowers can fill out forms and find out their chances of getting approved for a home loan. Continue reading
It seems like not a day can go buy without some industry observer proclaiming that the sky is falling in the Canadian real estate market. However, if data from the Bank of Montreal is to be believed, maybe the end times aren't as certain as some may think.
While it's no secret that the housing market has cooled in recent months, the BMO's Housing Confidence Report shows that nearly half of Canadian homeowners (48 percent) intend to purchase a property within the next five years. This number is relatively unchanged from fall 2012, meaning Canadians still have a high level of confidence in the housing market. Continue reading
Cash back mortgages allow borrowers to receive money back after the closing of a home loan. These types of mortgages are perfect for borrowers who could use extra cash during the mortgage process. Contact Canadian Equity to take advantage of a cash back mortgage.
What is a cash back mortgage?
A cash back mortgage is a type of home loan that gives borrowers money back after the loan has been closed. It is possible to obtain a cash back mortgage on either a purchase loan or a refinance. The money you receive from a cash back loan can be in the form of a lump sum or instalments. There is no rule for what the money must be used for, but many borrowers use cash back mortgages to help pay for any fees that may arise during the home loan process, as well as for the costs of moving into and renovating a new home. Continue reading
It seems that recent good news regarding the Canadian real estate market wasn't an isolated incident, as new data shows home prices are on the rise.
According to the Teranet-National Bank house price index, home prices increased 2 percent overall on a year-over-year basis during May. This comes after a 2 percent gain in home prices during April, creating a pattern of slow but steady growth.
Seven of the 11 cities across the country tracked by the index saw prices moving up above the national average. Quebec City saw a rise of 6.5 percent, while Calgary and Hamilton each saw an increase of 5.8 percent. Winnipeg saw prices rise 4.6 percent, Edmonton experienced an increase of 4 percent and Toronto showed gains of 3.9 percent. Continue reading
When it comes to getting a home mortgage approved, "pre-approval" can be one of the trickiest factors in determining mortgage rates. With the housing market always at least somewhat in flux, many people looking to buy turn to pre-approval as a way to find a preferred rate as they search for a home.
But even for mortgage professionals, the term pre-approval can take on different meanings. And to make things even trickier, it is often conflated with the term "rate hold," which to the average consumer, as well as many lenders, sounds like two different things. However, some mortgage professionals view them as the same. So, how does one make sense of this already complicated process when people inside the industry can't even seem to completely agree? Continue reading
When evaluating the mortgage market, one of the best ways to understand how the industry is faring is to look at the ways consumers are going about the process of finding a mortgage. The manner in which borrowers react to rules and regulations, use various tools to search for mortgage information (including lender websites and mortgage calculators) and whether or not they choose to use a mortgage broker, are key indicators of the health of the overall market.
Recently, the Canada Mortgage and Housing Corporation (CMHC) released a survey that revealed some of that information, and its results serve to shine some light on how borrowers feel about the mortgage process in 2013.
Obviously, the internet plays a huge role in how people research mortgage options. The report states that 63 percent of consumers searched for information about mortgages online. On top of that, 84 percent of consumers researched mortgage rates online. While that already represents a large majority, it is highly likely the number will continue to grow. That means lenders and brokers who haven't already put a lot of work into developing their online footprint are far behind the curve, and those who already have put in that effort will need to continue to do so in the future. Continue reading
Rules issued by the Department of Finance last year that tightened mortgage standards appear to be having their intended effect, slightly suppressing demand by first-time buyers, especially in British Columbia. While approximately 20 percent of people across Canada who were looking to secure first-time home loans delayed such a move due to the new rules, that number was higher in B.C., where one-third of respondents said they would wait (compared to a low of 11 percent in Ontario), according to a study commissioned by BMO.
Prices remain high
Despite the decline in demand among first-time buyers, overall housing prices have remained high, continuing to set records in most places across the country. With mortgage rates still below 3 percent, demand has remained steady and inventory relatively low, since few people are allowing talk of a possible housing bubble to scare them into selling. Continue reading
The reports of the demise of Canada's housing sector appear to have been greatly exaggerated. According to the Royal LePage House Price Survey, housing prices across the country continue to post relatively modest gains, and home loans have been kept in check, leading to market stability. And, defying those who had predicted an imminent collapse, it doesn't appear there will be any extreme price movement either way through at least the end of 2013 and probably into 2014.
Avoiding the housing bubble
Four different sets of rules have been issued by the Department of Finance since the worldwide housing bubble collapse in 2008, all of which increased lending restrictions. Those efforts, along with the creeping rise in mortgage rates over the past few months, appear to have helped the Canadian housing sector into a soft landing, avoiding any possible catastrophe. Continue reading