4 Things to Consider Before You Move In Together

moving truck

Flickr: evaekeblad

Buying a home with someone is a huge commitment. But beyond just the financial aspect of combining your savings into one down payment, taking out a mortgage and making mortgage payments together, there’s a lot to consider before moving in with someone – no matter how long you’ve been together.

If you don’t learn to compromise, moving in with a partner can come fraught with problems, says registered clinical counsellor Melinda Freitas. And what may seem like a non-issue for one person may feel like a huge issue for the other. Continue reading

3 Things First-Time Homebuyers are Doing Right

first time homebuyers

Flickr: spierisf

There’s been a lot of talk in the media lately about whether or not homeownership is a good investment. As a late 20-something, I was raised to believe that building equity in a home would be one of the best investments I could ever make. But as prices continue to go up, just saving the initial investment for that home – a down payment – seems further and further out of reach. And I know I’m not the only hopeful first-time homebuyer who is feeling the pinch.

Last month, BMO released a survey that showed we – first-time buyers* – have had to increase our budgets to an average of $316,000; that’s up 5.4% from the $300,000 we were budgeting in 2013. Since the national average home price is now up to $401,419 – a 6.0% increase from March of last year – our increased budgets, on average, are on par with what’s happening in Canadian real estate. But can we actually afford these home prices?

As it turns out, we can. Of course, it can take some serious penny-pinching, budgeting and lifestyle-changing efforts to make it happen – but we’re up for the challenge. Here are three things first-time homebuyers are doing right, before entering homeownership. Continue reading

Bank of Canada Interest Rate Announcement: April 16, 2014

Interest Rate Annoucement

For the 29th consecutive announcement in a row, the Bank of Canada (BoC) has revealed that the overnight lending rate will remain at 1 per cent – a position its held since September 2010.

The overnight lending rate – which is the interest rate at which banks lend money to one another – is expected to remain unchanged until mid-2015; that would mark nearly five years at 1 per cent, which would be the longest span of inactivity in more than 60 years. This is good news for variable rate mortgage holders whose rates are attached to Prime, as an increase to the overnight lending rate could result in an increase to some lenders’ Prime rates and, therefore, variable mortgage rates. Continue reading

Is a 3-Year Variable Rate Mortgage Term Right For You?

paperwork

Flickr: nerdcoregirl

Two of the biggest decisions you’ll need to make regarding your mortgage financing are which mortgage rate type and mortgage term you want. Would you prefer a fixed or variable mortgage rate? And how long do you want to commit to that rate for? Each combination makes sense for different reasons, and the decision is usually personal. To get some insight, we decided to interview homeowners across the country, to see which rate types and terms they chose and why. Today, let’s look at what a 3-year variable rate is and who is choosing it.

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Save Money on Your Mortgage Using the Three-Legged Stool Method

three-legged stool

Flickr: D68 design+art

With today’s record breaking housing prices, homebuyers are taking out larger mortgages than ever before. With larger mortgages comes higher mortgage payment amounts and added interest costs, so the incentive to save money wherever possible is high. If you’re wondering what the most effective way to save money on your mortgage is, there’s more than one answer – and I want you to use all of them. Keep reading to find out what I mean.

Factors That Affect the Cost of Your Mortgage

There are three major factors that will affect how expensive your mortgage is over time:

  1. The principal or mortgage amount,
  2. The mortgage rate, and
  3. The amortization period.

These three factors are like the legs of a stool – holding up the cost of your mortgage. Continue reading