Which Mortgage Features Are Right For You? + MORE Jul 25th

For most people, buying a house is the biggest decision they’ll ever make. So it’s no wonder that having to pay for thing over the next 25 or 30 years makes a lot of people pretty anxious.
After all, it’s a pretty intimidating transaction. First you have to assemble a stack of cash for the down payment and closing costs. Then you have to convince someone to lend you an even more staggering sum – generally 80 per cent or more of the purchase price.
Then there’s the actual mortgage decision. Everyone knows friends or relatives who, lured by record low interest rates, have stretched their budget buying homes only to find themselves struggling to keep up with not only colossal mortgage payments, but with more than a few unexpected expenses as well.
Also read: The First Time Home Buyer’s Guide>
Rates Not The Only Factor To Consider
But it’s not simply about interest rates. Ask yourself these questions: How long do you plan to live in this house? Will you have or hope to make home improvements? Where do you see yourself in five or ten years? Is your relationship stable? Is your family growing? What’s your cash flow going to look like?
If you’re going to stay in your house and plan to pay off your mortgage gradually, you may prefer get a fixed rate loan where the payments won’t change…

TORONTO – Cameron Klem, a business owner in the construction industry, is looking to sell his home in Edmonton and buy a new one closer to the school his fiancee, a teacher, has been transferred to.
But despite a solid credit score, “huge revenue” and having been in business for seven years, Klem is having trouble securing a mortgage.
“It’s a pain,” says Klem. “It makes me ask myself if being self-employed is even really worth it when you have to go through this much trouble.”
Experts say lenders have become more stringent when it comes to providing mortgages to the self-employed, which could leave business owners shelling out more money to the taxman in order to prove their incomes.
The worst thing about being self-employed »

“Rule changes over the past six or seven years have dramatically limited the ability of self-employed people to get mortgages,” says Chad Oyhenart, a Vancouver-based mortgage broker at Dominion Lending Centres.
“It’s become quite a bit tougher on them…

Earlier this year HomEquity Bank increased its maximum loan-to-value on a reverse mortgage to 55% (in some cases slightly more). It was a change made with little fanfare, but one that will provide necessary cash to thousands more senior homeowners. Prior to this change, the bank lent up to one-half of a property’s appraised value. Now, qualified seniors can access at least $20,000 more on a $400,000 property, for example. This money can be a lifeline when an elderly homeowner has immediate expenses (e.g., medical costs), but no other source of liquidity and a need to stay in their home. READ MORE

Summer can be a tough season on the wallet. Whether you’ve shelled out for a family road trip, or are a student scraping together school funds, it’s a challenge to balance fun in the sun with prudent financial practices.
This week, we’ve looked at ways Canadians can cash in, whether from school grants, the new UCCB, or with their mortgage.
Is a Canadian Recession a Reality?
The economic data may paint a bleak picture, but it seems the Bank of Canada and Department of Finance are hesitant to say the “R word”. Since last week’s rate cut, economists and consumers are left wondering – has Canada officially entered a recession, and what does the economic future hold?
Read Rubina’s Blog | Is a Canadian Recession a Reality?>
5 Tips for Students Trying to Afford University
Ah, summer “vacation” – a frantic 16-week work period for post-secondary students looking to pad their bank accounts before the school year. Students know it’s a challenge to make funds last through the coming semesters…

With the latest Bank of Canada (BoC) rate cut to 0.50% comes a reminder that many would like us to believe our housing market is tenuous. Once again there is a lot of discussion about just how overheated our market is and the dire circumstances many current home buyers are likely to find themselves at renewal time.
First, let’s think about why the Bank of Canada decided to cut interest rates once again last week. In January the BoC surprised many of us and cut the overnight rate in response to a rapid decline in oil prices. This time around it did so because the Canadian economy has not rebounded the way the Bank had hoped.
In an effort to stimulate spending, the Bank used one of its levers to lower the cost of borrowing. In doing so the value of the loonie further decreased thereby making imports more expensive and exports cheaper. The hope is that foreigners will both invest in and buy Canadian goods. The caveat to that appears to be Canadian real estate where many economists and policy makers would prefer that no additional investment takes place…