Finding help in this crazy housing market + MORE Nov 21st

For many Canadians, the dream of owning a home while earning a modest income just keeps getting harder and harder to achieve. But various governments as well as some non-profits and some private developers offer options to help struggling first-time home buyers get into the market. Here are three programs that can help.
1. Non-profit builder equity top-ups
In the Greater Toronto Area, Options for Homes, a non-profit builder condo developer, helps home buyers to purchase a new-build condo using an equity top-up.
The equity program works by providing first-time buyers a second mortgage that’s registered against the property. This second mortgage acts like an interest-free loan—providing buyers as much as 13% of the down payment on a new condo. Better still, this second mortgage doesn’t have to be paid back until a property is sold—an approach that lowers the size of the first mortgage and increases the down payment to as much as 20% to 25%.
Here’s how it works:
→ You opt to purchase a two-bedroom, 810-square-foot condo for $220,000
→ You contribute $15,400 as a down payment—or about 7% of the purchase price
→ Because you have less than a 20% down payment, you’d have to tack on CMHC fees, but the addition of another $7,365
→ But, with Options for Homes you could be eligible for an additional $28,600 equity contribution…

TORONTO — The head of Canada’s federal housing agency says regulators should explore the possibility of raising the minimum down payment required on a home as a way of easing affordability and reducing risk to the financial system.

“Politicians are tempted to help first-time homebuyers enter the market, but low down payments may be part of the problem, adding to affordability pressures and macro-economic vulnerabilities,” said Evan Siddall, president and CEO of Canada Mortgage and Housing Corp.

Evan Siddall, president and CEO of CMHC in an interview on June 16, 2014. (Photo: Fred Lum/The Globe and Mail via The Canadian Press)

During a speech at the Bank of England’s offices in London Friday, Siddall said that low minimum down payments fuel housing demand and lead to higher housing costs.

That ultimately ends up hurting the young, first-time homebuyers that such policies were purportedly designed to help, Siddall said.

Boosting the minimum down payment could help offset the effects of rock-bottom interest rates, which have encouraged borrowers to take on excessive mortgage debt, he added…

Editor’s Note:
This is a weekly personal-finance column provided by the website NerdWallet and distributed by The Associated Press. The opinions contained are those of the columnist alone.
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Ten years ago, bullies had taken over the playground. Financial service firms preyed on their customers with impunity:
—Lenders made expensive, risky mortgages to people who couldn’t afford to pay the money back.
—Credit card issuers foisted overpriced insurance and other add-on products on millions of unsuspecting customers.
—Credit bureaus ignored evidence submitted by people disputing errors in their credit reports.
—Companies sold delinquent debts to collection agencies that ran amok, violating fair debt collection laws and strong-arming people into repaying debts they didn’t even owe.
People’s complaints fell on deaf ears, since consumer protection wasn’t a priority at any agency. Huge swaths of the credit and debt industries, including credit bureaus, collection agencies and payday lenders, operated with little government oversight…

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