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March 2012
I just listened to an interview with mortgage broker, Peter Finch, expounding on Canada’s predicament with CMHC, Canada’s Mortgage and Housing Corporation. This is the governing body responsible for providing mandatory mortgage insurance. Apparently, should mortgage rates increase more than 1.5%, it could spell trouble for many homebuyers and therefore CMHC, which is nearing its maximum capability of covering its responsibilities should there be a significant number of mortgage defaults.
What this means is that the record low interest rates we are currently enjoying are likely to continue for some time. This is good. Stability is always good. Real estate investors can proceed with relative confidence knowing that rates are likely to remain the same. However, some first-time buyers will be squeezed out of entering the market because of new lender policies on the horizon designed to eliminate those buyers deemed to be at greater risk of defaulting. In the long term this also a good thing.
So what can you do to help your children who are yet to purchase their first home? I see more and more young buyers being helped with their down payment by their parents. Housing prices, especially in the Victoria area, are out of reach for most young buyers without some kind of financial help. Many parents are making the decision to release inheritance money now, just for this very purpose.
I’d say it’s time to have a nice family discussion.
Valerie Edwards
Sensitive Sales Solutions
RE/MAX Camosun
Cell: 250-477-9947
Email: valerie@valerieedwards.com
Website: www.valerieedwards.com
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