Home Ownership, yes!

OOPS, what happened? I moved in and I didn’t consider all that needed to get done.

Most homeowners admit to making at least one mistake when they purchased their home, according to a homeownership poll conducted by RBC a few years ago. 

While owning a home is a dream come true for many, it can also be stressful if you find you’ve made an error. 



Below are the top three mistakes the poll found, along with a few more you might want to think about before taking the leap.

1.  Property needed work – a lot of it. Even with a home inspection, new homebuyers may get into a home and find it’s become a money pit. Don’t rush in, sit down and plan.
2. Not having a bigger down payment. Once in a house, many homeowners are overwhelmed with the costs. Once again, don’t rush in, sit down and plan.
3. No Home Inspection. If you skip this step you might find the cost of repairs needed may be astronomical, especially if you purchase an older home. An inspector will look at the overall foundation and structural features of the house, the plumbing system, will look for the presence of mould or pest infestations, check the heating and air conditioning, as well as the electrical system.
4. Not budgeting for the increased costs. When considering the extra costs, remember there are mortgage payments, property taxes, and usually higher utility bills. On top of that you’ll may want to redecorate, perhaps buy new furniture and/or appliances. There may be some landscaping work to be done and you may want to renovate. 
5. Not knowing the closing costs. Closing day is coming and you get the call from the lawyer to come in and sign the papers and, bring a certified cheque or bank draft for X amount of dollars. WHAT? Yes, fees and disbursements. There’s the land transfer fee, the title fee, the lawyer’s fee, etc. Don’t get caught short.
6. Forgetting about future needs. If you’re planning on having kids, you may want to consider the type and size of home you’re purchasing. 
7. Not getting a pre-approved for a mortgage. You won’t know what price range you can afford and what a lender will give you without a pre-approval. It’s easy; it’s free and absolutely necessary. If something turns up that may prevent you from purchasing, a mortgage professional can offer you solutions. 
8. Falling in love with a house. Fall in love with each other but not with a house because you may not listen to some good advice. You will ignore the obvious cracks in the foundation because it has 18ft. ceilings and has that great stone fireplace you’ve always wanted. Beware of buyer’s remorse.
9. Not checking market value of neighbourhood. This can cause some purchasers to pay too much; especially a home that has been upgraded to the max in an area that won’t keep its value – unless you plan to live there the rest of your life.
10. Focusing too much on interest rates. Don’t rush in to a market because the rates are low. And don’t focus on getting the lowest rate. Focus on the mortgage loan that works best for you and your financial situation. 

Having said all that, the most recent RBC poll (April 2019) found that Canadians are confident and know what they want.

• Eight-in-10 Canadians say a home or condominium purchase is still a good investment
• Canadians feel it makes more sense to buy than rent 
• Canadians are well positioned to weather a potential downturn in housing prices or an increase in interest rates 
• Affordability and being in a safe neighbourhood top the list of what Canadians must have, while buying in ‘the right‘ neighbourhood is less of a concern 
• Canadians are most willing to sacrifice the conveniences of being close to a major highway (16%), dining and entertainment (13%), good schools (11%) and public transit (10%).

So, bottom line is: Don’t rush in, sit down and plan. A mortgage professional can help you get that home by walking you through every step of the home buying process, with fewer mistakes, and fewer regrets.

A new world view – the impact of the Millennial generation

The world has changed dramatically over the past eight years since the Global Recession hit in 2008. The biggest change and one that will have the biggest impact to future economies is the changing demographics of the world’s population.

Millennials (ages 18-34) have now surpassed the Baby Boomer generation (ages 51-69) and Gen X’ers (ages 35 to 50) will surpass Boomers by 2028. These two groups, Millennials and Gen X’ers,  are quite opposite to Boomers in their spending habits, in their lifestyle choices, and their personal goals and will have a definite impact on our economies worldwide
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Their spending habits, for example, are vastly different: Millennials are thrifty, buying more but spending about a quarter less on average than Boomers or Gen Xers, according to a new TD Bank report.

Research has found that Millennials are “confident, self-expressive, liberal, upbeat and open to change.” There are also some interesting differences between them and older generations. Here is how they match up on what they consider the ultimate reward for paid employment:

1.  Boomers want a prestigious title and the corner office.
2.  Gen Xers want the freedom not to have to do something.
3. Millennials prefer meaningful work.

About having children

1.  Boomers are controlled, their children were planned.
2. Gen Xer’s are doubtful about the possibility of becoming parents.
3. Millennials are definite about parenthood and view marriage and parenthood as more important than careers and success.

Another important difference is that Millennials are savers, smart shoppers and very tech savvy.  They are better money managers than older generations and live within their means. Despite the burden of student debt they seem to have money.

The Sharing Economy

What older generations considered “must-haves” are no longer important. For example, 30% of Millennials do not intend to purchase a car in the near future. Instead, they like the idea of Uber. They like to travel but check out sites like Airnb. Hotels and rental car companies have already begun to feel the effects.

The Freelance Economy

The freelance or “gig” economy has been growing for the past 10 years.  Millennials like the flexibility of freelance work for its flexibility. One reason is they are vastly under-employed despite having the most education and freelancing has become a viable alternative.

What about housing?

They like the idea of home ownership. According to the TD Bank study, the top three priorities for Millennials before purchasing a home include saving for a down payment, paying off debt and having a steady job. And 63% of them are considering purchasing a home in the next two years. Because they are a generation of savers, nearly two-thirds are saving for a down payment, citing it as the biggest hurdle. Other key findings include the following:

•  One-fifth of Millennials (19% ) plan to supplement their savings for a home with financial assistance from friends and family, and 65% plan to have a spouse or partner as a co-signer
• They want to pay off their mortgages quickly.
• Seventy-eight per cent want move-in ready homes. 
• Seventy-seven per cent  percent cited mortgage rates as the most important factor when purchasing a home
• Eighty per cent of Millennials feel commute time is key when purchasing a home. These location factors weigh heavily on their decision about buying in increasingly expensive urban housing markets.

Here’s what they don’t want to do:

• Move into a smaller house than they initially desired (68%)
• Sacrifice amenities e.g., convenient access to shops and services (81%)
• Compromise on their top choice of neighborhood (80%)

The New Economy

While it’s hard to predict what will happen in the future, it’s clear that Millennials and the technology revolution have already impacted global economies. What they do, their attitudes and behaviours are leading indicators of what's to come -- what they do will shape the rest of the world. They represent a huge shift in how people learn about the world around them and how they engage in it. Perhaps it’s time for a rethink about what is “normal” in today’s economy and work towards adapting to the changes.

Avoid common mistakes when purchasing a home

Young Canadians feel that housing is still a good investment, according to the 21st Annual RBC Home Ownership Poll. Nearly nine-in-ten (86%) of those aged 25-34 believe that owning a house or condo is a very good investment, up from less than eight-in-ten (78%) in 2013. Interest in purchasing has increased in nearly every region in the country from last year. This change in buying intention bodes well for the housing market and shows a renewed confidence in young buyers.

Those potential home owners named job stability and manageable debt levels as the reasons why they would consider buying. Among those likely to buy a home within the next two years, four-in-ten will be first time homebuyers.

The old adage “Buyer Beware” however, still holds true. Most homeowners admit to making at least one mistake when they purchased their home according to the last year’s RBC Home Ownership Poll. While owning a home is a dream come true for many, it can also be stress-laden if you find you’ve made an error.

Here are 10 mistakes to watch out for when you take the leap:

1. Property needed work – a lot of it. Even with a home inspection, new homebuyers may get into a home and find it costs more than they expected to make improvements.  Don’t rush in, sit down and plan.
2. Not having a bigger down payment.  Having a larger down payment can lower mortgage payments, which could help with the household budget.
3. No Home Inspection. If you skip the step you might find the repairs needed may be astronomical, especially if you purchase an older home. An inspector will look at the overall foundation and structural features of the house, the plumbing system, will look for the presence of mould or pest infestations, check the heating and air conditioning, as well as the electrical system.
4. Not budgeting for the increased costs. Consider all the costs involved and create a realistic budget.  There are monthly mortgage payments, property taxes, and utility bills. On top of that you’ll probably want to redecorate, buy new furniture etc. Plan your budget accordingly. 
5. Not knowing the closing costs. Closing day is coming and you get the call from the lawyer to come in and sign the papers and, oh, bring a certified cheque or bank draft for X amount of dollars. WHAT? Yes, fees and disbursements. There’s the land transfer fee, the title fee, the lawyer’s fee, etc. Don’t get caught short.
6. Forgetting about future needs. If you’re planning on having kids, shop accordingly.  
7. Not getting a pre-approved for a mortgage. You won’t know what price range you can afford and what a lender will give you without a pre-approval. It’s easy, it’s free and absolutely necessary. If something turns up that may prevent you from purchasing, a mortgage professional can offer you solutions.  
8. Falling love with a house. Fall in love with each other but not with a house. You will not listen to the advice everyone is giving you. You will ignore the obvious cracks in the foundation because it has 18ft. ceilings and that great stone fireplace you’ve always wanted. Beware of buyer’s remorse.
9.  Not checking market value of neighbourhood. This can cause some purchasers to pay too much. Especially a home that has been upgraded to the max in an area that won’t keep its value – unless you plan to live there the rest of your life.
10.  Focusing too much on interest rates. Don’t rush in to a market because the rates are low. And don’t focus on getting the lowest rate. Focus on the mortgage loan and term that works for you and your financial situation.