According to a new consumer study, 8 of 10 millennials in Canada expect to buy their first home in the next five years.  HSBC’s study Beyond the Bricks: the Meaning of Home was conducted in 9 countries including Canada, Australia, UK, the US and China.

Millennials could be the primary drivers of the first-time home buyer market.

While just over a third of millennials in Canada own their own home the study found 82% of millennials (Canadians born in the 80s and 90s) plan to buy a home in the next five years. However, the study reveals that 69 per cent of respondents say they are finding it hard to save a down payment while a third could not afford the type of home they wanted.

Millennials are going to have to save more money for a down payment to get into the first-time home buyer market.

New housing regulations implemented in the fall of 2016 creating tougher borrowing policies has already put pressure on Winnipeg home buyers. The government expanded stress tests making it harder for nearly 20% of new home buyers to qualify for mortgages. It’s estimated 20% of home buyers aren’t qualifying for less purchasing power as before the new regulations.

The HSBC study found that 21% of millennial home owners moved back in with their parents to save for a deposit. More than a third (37%) of millennial home owners used Mom and Dad as a source of funding.

The millennials are going to have some work to do if they are going to drive the first-time home buyer market.

The average price of a home in Winnipeg is $272,553. A 5% down payment would require $13,627 be saved.  According to Statistics Canada, the median after-tax income for the average household in Manitoba is $61,800.  The household saving rate in Canada is 5.8% a year. It would take the average person in Winnipeg approximately 4 years to save for a 5% deposit on a house.

Vertuity Mortgage’s First-Time Home Buyer Guide has a section dedicated to saving for a down payment. Click here to visit the guide:  First-Time Home Buyer Guide

From the First-Time Home Buyer Guide here’s  7 steps for saving for your down payment.

1. Have A Clear Goal
2. Open A Dedicated Savings Account/TFSA
3. Pay Off Any Other Debts
4. Tighten Your Belt and Spend Less
5. Plan and Budget
6. Downgrade Your Current Vehicle
7. Check and Negotiate Interest Rates

New regulations for the Canadian housing market in 2017 are likely per a recent Reuters poll. Tougher borrowing policies are already putting pressure on Winnipeg home buyers.

Last fall, new housing regulations expanded stress tests making it harder for nearly 20% of new home buyers to qualify for mortgages. New federal measures also tightened mortgage insurance rules capital gains exemptions.

Despite these steps, 13 out of 20 economists polled by Reuters thought it likely local or federal governments will introduce new regulations in 2017 to continue to reign in housing prices.

For consumers, the confusing rules have led to higher borrowing costs and less borrowing power. It’s a more confusing process for borrowers searching for the right mortgage. Getting approval for a house at the best rates and terms is harder now.

Call Vertuity Mortgage today at (204) 888-4663

Starting in October of 2017, all insured mortgages are subject to a stress test rate based on the Bank of Canada’s posted five-year fixed rate (currently 4.64 per cent). The test ensures the borrower can afford the mortgage payments if mortgage rates go higher. The Bank of Canada rate is higher than the rate being offered by lenders and changes the price of a home most people can afford.

Winnipeg home buyers are having to change their expectations on a case-by-case basis. Each potential home buyer is facing stress tests to determine the economic viability of a new home purchase. Some home buyers may need to save more money for a larger down payment. Other home buyers may have to purchase less expensive homes.

The rule changes have led to a lot of uncertainty in the market. Home prices aren’t changing for the better so far. In Winnipeg, the average price for a home in January, 2017 was $272,553, a 2% increase over January of 2016, per the Canadian Real Estate Association.

It is crucial that buyers have someone who is on top of these changes and understands all the options available in the market to them. Today, a Mortgage Broker with multiple lenders is a great way for a buyer to ensure they are getting a proper mortgage for their unique situation.

Vertuity Mortgage works with a broad base of lenders to find the right mortgage for a customer. With nearly every potential borrower being affected by the mortgage rule changes, a range of borrowers is becoming a necessity. Vertuity Mortgage assesses each buyer’s needs and works to find the right mortgage. Recent rule changes mean the mortgage process is more complicated. Vertuity Mortgage walks every customer through a no hassle process to find the right mortgage.

It’s a challenging time to buy a home in Winnipeg especially if you’re a first-time home buyer.

The federal government implemented a more stringent mortgage stress test for new mortgages in October of 2016. The new rule change requires all new mortgage applicants to pass a mortgage rate stress test for insured mortgages regardless of the amount of a down payment. The test determines whether a buyer can afford to make payments if mortgage rates rise. First-time home buyers may have a challenge to face as buying power has been reduced by nearly 20%.

There’s no reason to panic, however.  Buyers can still find the right home at the best mortgage loan rate.  It will require some hard work, patience, and proper guidance but you can navigate the murky waters of home buying successfully this year.

Get the Right Team of Professionals to Help You

Even if this isn’t the first home you’ve bought you want to have an experienced team of professionals around you.  Vertuity Mortgage has a preferred vendor program to help you gather your team of experts. We have strong ties in the real estate community and can help with all aspects of your home.  Vertuity Mortgage has relationships with top realtors, lawyers, insurance agents, movers, contractors, cable companies, furniture stores and more.  Lean on your team to make the right decisions.

Decide How You Want to Live, Not Where You’ll Live

Location is a very important factor in deciding on your new home. Where do you buy a home in Winnipeg? Which side of town you should live on? What neighborhood? Winnipeg has dozens of neighborhoods to choose from. With the market as competitive as it is and with the new buying restrictions it will be helpful to first determine how you want to live.  Is the view really that important?  Does a large yard really matter?  Do you need the third garage?  A lot of factors go into the price of the house you want to buy.  Make logical decisions about what’s important in how you want to live.  Avoid make impulse buyer decisions in today’s market.

Work Your Budget

If you’re going to buy a home in Winnipeg, you need to know what you can afford.  You’ve probably been saving money for a while.  A budget comes in handy after you’ve saved for your down payment.  Any house you are considering will change your budget.  To buy a home in Winnipeg you need to adjust your budget and make sound decisions about the budget changes.  Is it the right home for you considering your budget?

Work Closely with Your Mortgage Broker

Vertuity Mortgage understands the government’s changes to the mortgage market and knows how to work with them.  It’s not just a matter of finding you the best interest rate, it’s also a matter of buying power.  How much home can you afford given the government’s new requirements for stress testing? You need to work closely with your mortgage specialist to really understand how much home you can purchase and what your budget will look like.  Vertuity Mortgage has a wide range of mortgages to meet your needs. It has access to over 40 different lenders and typically works with 5-10 lenders to meet a client’s needs. It’s a matter of who has the best products in the industry to help the client the most.

Don’t Be Desperate

In competitive markets, it can be hard to be patient.  You visit house after house and put in offers only to get outbid.  If you’re going to buy a home in Winnipeg, you need to avoid desperation. Work with your mortgage broker and realtor to develop your long-term plan.  Don’t put a short timeline on the purchase.  Give yourself enough time to make the right decisions in a tough market.  If you set your timeline too short, you’ll tend to make rash decisions.  Work the market within the plan you set with your mortgage broker and realtor.  Keep the emotions in check as you go through the process.  You want to buy a home in Winnipeg but you want to buy the right home.

Contact Vertuity Mortgage for a personal consultation and learn how to get the best mortgage loan rates in Winnipeg.

Call Vertuity Mortgage today at (204) 888-4663

If you’re in the market for a new home in 2017, at some point you’re going to wrestle with your mortgage amortization period.  Canada has shortened the amortization period over the years but your mortgage broker can show you how this may benefit you.

It’s easy to confuse the mortgage amortization period with the term of the mortgage. The amortization period is the total length of time it will take you to pay off your mortgage. The mortgage term is the length of time you commit to a mortgage rate and lender.

If your down payment on a house is less than 20% your maximum amortization period is 25 years. A mortgage with less than 20% down is a high-ratio mortgage and must carry mortgage default insurance.  The insurance protects the lender in the case of default. Because of the high-risk nature of this type of mortgage the amortization period limit is 25 years.

The minimum down payment on a home is 5%.  With a 5% down payment, you would have a maximum amortization period of 25 years.

If your down payment is greater than 20% of the purchase price you don’t need mortgage default insurance and you can secure a conventional mortgage.  The maximum amortization period is up to 30 years.

The amortization period can greatly affect the overall amount you pay for you home.  The table below from the Financial Consumer Agency of Canada shows how a change in the amortization period affects payments.

Shorter amortization periods save you money because you pay less in interest costs over the life of the mortgage. With fewer payments you build equity in your home faster and you pay the mortgage off sooner. Monthly payments are higher.

With longer amortization periods, you pay more interest over the life of the loan but monthly payment amounts are lower. You may be able to afford more home because your payments are lower. You build equity in the home at a slower pace and it takes longer to own the home.

Another benefit of a longer amortization period of the cash flow it frees up.  The difference between a 20-year mortgage and a 25-year mortgage may be around $200 a month.  If you have something productive to do with the extra money the longer amortization period may make sense.

You don’t have to stay with the amortization period you select when you apply for the mortgage. You can always choose to shorten the amortization period at a later date.  Shortening the amortization period saves you money on the amount of interest you pay.  You can also make extra payments or choose an accelerated payment option.  The main point is you always have options.

Vertuity Mortgage can present you with amortization schedules showing you how the mortgage term and amortization rate can work together to get you the right mortgage. Obviously, there’s wide range of options. Your Vertuity Mortgage broker will work with you to determine the right mortgage for you based on your individual needs.

Recent rule changes for mortgages has made buying a home in Canada more complex. Winnipeg mortgage brokerage Vertuity Mortgage is helping its customers navigate the new rules and complexities of home buying.

One of the major rule changes is the mortgage stress test. As of October 17, 2016, all insured mortgages are to be tested at a stress test rate based on the Bank of Canada’s posted five-year fixed rate (currently 4.64 per cent). This rate is higher than the rate being offered by lenders. The stress test changes the price of a home most people can afford. Other rule changes affect the type of mortgages available to borrowers as well as non-Canadian residents avoiding capital gains tax when selling properties.

Interest rates are rising. TD Bank as well as Royal Bank have increased fixed mortgage rates in recent weeks. Mortgage rates could rise for some types of borrowers. Buyers competing for fewer available mortgages could lead to higher interest rates. Locking in the best mortgage rate available has always been important. With rates rising its going to become more important.

In November, 2016 the Canada Mortgage and Housing Corp. (CMHC) said raising the down payment for homeowners with loans backed by federal mortgage insurance could be a possibility. In 1998, the minimum down payment for first-time home buyers was 10 per cent. The Canadian government reduced the minimum down payment to five percent, then down to 0% to boost the economy.

CMHC insured mortgages currently must have a property value below $1 million. For a purchase price of $500,000 or less, the minimum down payment is 5%. For a purchase price above $500,000, the minimum down payment is 5% for the first $500,000 and 10% for the remaining portion. Higher down payment requirements could make it even harder for first time home buyers.

With the rule changes, higher interest rates and possibly higher down payments Canadians may find it harder to purchase a home. Your mortgage broker is a good person to known. Vertuity Mortgage is working with customers to adapt to the new changes and affordably buy a home. As a mortgage broker, Vertuity works with a broad base of lenders to find the right mortgage for a customer. Working with mortgage lenders on behalf of the client is an essential strength for Vertuity Mortgage. Every mortgage lender is affected by the recent mortgage rule changes and must adjust. Vertuity Mortgage understands the rule changes and can work with lenders on your behalf.

Some behavior changes may be needed as well. Some customers may be buying less expensive homes. Experts say the new mortgage rule changes could affect 10% of the home buyer market. Higher down payments may be required. Future home buyers may have to save for a larger down payment. In some cases a co-signor may be necessary.

There are a lot of options available to customers. Vertuity Mortgage wants to work with people to reduce the effect of the rule changes and help buyers get the best mortgage available for them. Vertuity Mortgage is Winnipeg’s leading mortgage brokerage and is available when you call.

As a mortgage broker, we’re usually asked how we get paid.  It’s a very good question but it’s a question that needs an explanation.

As a mortgage broker, we have access to many lenders including major banks, credit unions, specialty lenders and mortgage-specific lenders.  We’re able to survey the landscape and find the right lender for our customer’s needs.  We also help our customer with the process of getting a mortgage.  We educate and inform our customer of the best options available.  We offer these services to our customer for free. There’s no cost to our customer.

100% Commission

We work on 100% commission and are paid by the lender when a mortgage is completed. A lender’s payment to a mortgage broker could be a flat finder’s fee or a percentage of the mortgage value paid as a commission. The commission may be based on the size of the loan that includes the term of the loan.

We only get paid when a mortgage is completed.  If we work with a customer for months and the mortgage doesn’t get completed, we don’t get paid. While this does happen occasionally we realize everyone is in a different stage of development when it comes to mortgages.  A first-time buyer who’s saving for a down payment and is three years away from buying a home is important to us.  So is the person who’s refinancing a home after the first five years.

Every mortgage broker has a funnel of potential customers.  Some customers are just getting started and are far away from an actual purchase.  Other customers are in the heat of battle and are purchasing soon.  We work with customers at the long end and the short end of the stick.

Customer’s Best Interest

It’s in our customer’s best interest that we service the customer first and do our very best to obtain the right mortgage for each customer based on his or hers’ unique set of circumstances.

Commissions may influence some mortgage brokers.  On the other hand, we use a revenue-neutral mindset where we work with the best lenders for each customer first.  We don’t think about the commission during this process. We maintain our objectivity and do what’s best for the customer.  It’s only after decisions have been made by and for the customer that we even think about commission.

We’ve spent the last 14 years in Winnipeg helping people across Canada with their mortgage financing needs. For the past 8 of these years we’ve worked with one of Canada’s largest financial institutions and we’re consistently one of the top mortgage producers in the nation.

Simply put, we wouldn’t be in business today if we didn’t put customers first.  Our business is built largely by referrals.  We see our customers at the hockey rink and the grocery store.  Our family, friends, associates, and neighbors are often our customers as well.  If we didn’t put them first we would be a leader in the industry for 14 years. No business is successful year in and year out without putting the customer’s needs first.

We accept the risk of working solely on commission and we make it work by putting you – our customer – first.