Can Canadians Still Afford To Own A Home After The Federal Government Modification Take Effect ?
The question many people find themselves scratching their heads over is can Canadians still afford to own a home? There has been a lot of discussion lately whether owning a home is still a reality not only for the average home buyer but for individuals just entering the market.
Much of this discussion has been kicked off and perhaps to some degree sensational by the media whether Canadian debt levels are going to collapse the overall economy like it did in the United States and around much of the world. Whether this topic is truly relevant has now become bone of contention for the Canadian government. The Federal government has now taken it upon themselves to modify the borrowing criteria making it more difficult to borrow money, warranted or not, to buy a home.
So the question many Canadians will be asking themselves come November is can Canadians still afford to own a home? To shed some light on this topic I have included an insert from Colleen Saunders an independent mortgage professional, Colleen Sanders who touches on:
THE FACTS BEHIND OUR RISING DEBT LEVELS
We are continually being reminded that Canadians are overextended and in too much debt. So much so, the Ministry of Finance has made getting a mortgage more difficult and changed the rules to qualify for financing.
What has recently been discovered is that while this may be true, we have generally borrowed wisely to build our net worth to record levels. Warnings about household debt often ignore assets and skew the picture.
The $10.3-trillion in net worth of Canadian households is the result of debt accumulated to finance assets such as real estate and investments, according to a Fraser Institute report. “When looking at debt levels it’s important to consider the degree to which Canadians are also using it to increase their net worth.” Read More Of This Article..
As Canadians are left pondering whether or not we can still afford to own a home...
As Canadians are left pondering whether or not we can still afford to own a home it is important to consider the major changes and whether they affect you.
- After October 17th we will be subjected to a stress test for all high ratio mortgages even when your down payment is greater than 20% reducing the amount a potential home owner can borrow.
- As of Nov. 30, the government will impose new restrictions on when it will provide insurance for low-ratio mortgages.
- New reporting rules for the primary residence capital gains exemption.
- The government is launching consultations on lender risk sharing.
Click here to read more on how these changes will affect you...
I would say this is more than just "food for thought" if you are looking to buy or sell a home in today's market. Can Canadians still afford to own a home affects both buyers and sellers. We can only wait and see how this is going to play out in the market place...