The Crown corporation – which insures Canadian mortgages – has had a consistently rosier view of the market than many private sector forecasters.
Canadian banks have recently issued reports probing the consequences of cheap money, and trying to predict whether there is a bubble in prices that will eventually pop and cause prices to crash. They are particularly concerned about Vancouver and Toronto, where some have predicted price corrections of up to 10% because of overbuilding in the condo market.
But CMHC said Monday Canadian markets would “remain steady in 2012 and 2013.”
Mortgage brokers are once again undercutting the banks and some are willing to buy down your rate – eating part of their commission in the process – to gain customers.
Steep mortgage discounts from the major banks have all but disappeared from the market, leading mortgage brokers to make sacrifices for market share amid new rumours that another major Canadian bank is going to bring its business completely in-house.
“There are so many options out there besides the banks. [These latest rate hikes] have given brokers an edge because bank pricing is notably higher,” said Rob McLister, editor of CanadianMortgageTrends.com.
McLister reported on his blog that CIBC is rumoured to be putting its broker arm, FirstLine Mortgages, up for sale.
Give people enough line of credit and they’ll hang themselves with debt.
The bad boy of borrowing products – that’s the line of credit. Recently, the federal government asked the banks to stop blithely handing out home-equity credit lines to people. In his new book The Wealthy Barber Returns, David Chilton writes that credit lines can be an excellent financial tool for disciplined people. “The other 71.9% of Canadians, however, should be careful. Very careful.”
Debt is never more comfortable than it is with the line of credit because money is instantly accessible and the rules for paying it back are slack. You can’t ignore a credit line, but you can stretch repayment out indefinitely. And then there’s the rising interest rate risk. Lines of credit are floating rate debt, and that means you’ll pay more every time rates edge higher.
Click here for some tips on managing a line of credit from the Globe and Mail.
The biggest mistake my husband and I are making when it comes to our finances is not having a joint budget.
If we had one, we would probably do a better job of coordinating our savings to reach our goals and pay down debt faster.
I realized this after listening to financial author, speaker and money management guru Gail Vaz Oxlade, who delivered an early Valentine’s Day talk for couples. She spoke at ING Direct’s café in downtown Toronto.
Vaz Oxlade discussed the six biggest money mistakes that couples make: 1) Hiding or lying about purchases; 2) Not having a budget; 3) Giving one person control over all the finances; 4) Denying the debt; 5) Sweating the small stuff; and 6) Not having an emergency fund.