Search

It seems like Canadian homebuyers just can't catch a break. For years, housing affordability was being eroded by rapidly rising prices in many housing markets. That has come to an end in recent months, with a market slowdown setting in. Home resales were down 13.9 per cent in April, and the average price was 11.9 per cent lower than a year earlier, at $495,000. For a while, it looked like the bright side of the slowdown would be that housing affordability would finally start to improve. And for a brief moment, it looked like that was happening. But it was not to be. Because even as house price growth cools down, a new threat has come to stalk Canada's homebuyers: rising mortgage rates. Those higher rates are causing affordability to worsen once again, with the mortgage payment on a representative home rising 1.2 percentage points in the first quarter of 2018, according to the latest housing affordability monitor from National Bank of Canada. It's eroding particularly quickly in Vancouver, where mortgage payments were up 3.4 percentage points, thanks not only to higher rates but to continuing rising house prices. Mortgage payments were up 1.2 per cent in Toronto. "Since buyers can hardly lay out a higher share of their income on housing than these two markets already required, a decline of prices is conceivable over the next few quarters if rates rise as we expect," the National Bank economists wrote. It now takes 80.3 per cent of an average household income to cover the mortgage on a representative home in Vancouver. In Toronto, it's 68.4 per cent. "Higher longer-term interest rates are creating a new environment in the Canadian mortgage market," Bank of Montreal senior economist Robert Kavcic wrote in a client note Thursday. For the first time in 10 years, homeowners coming off five-year mortgage terms are seeing higher rates when they renew, Kavcic noted. And that could change everything in the market. For years, lower mortgage costs were part of what drove the housing market upward. Homeowners renewing mortgages at lower rates were able to save more money and upgrade to a larger home more quickly than they would otherwise have been able to. That was part of what pushed up house prices in Canada in recent years. With mortgages now becoming more expensive at renewal time, that trend could end. If mortgage rates stay where they are, Kavcic estimates those renewing in the next few years will face a 0.5 percentage point increase to their mortgage rates — hardly enough to break most households' budgets. But if five-year fixed-rate mortgage rates were to rise to around 4 per cent (entirely conceivable, if the Bank of Canada keeps hiking its key lending rate), it would mean a full percentage point hike at mortgage renewal time. That would add $200 a month to the mortgage costs on a $500,000 property, Kavcic estimated. "This is not a huge hit that will debilitate the economy, but it's clear that a decade of persistent mortgage renewal windfalls is behind us," he wrote. But there may be some relief, at least for those willing to take on a variable-rate mortgage. https://ca.yahoo.com/finance/news/apos-threat-stalking-canada-apos-135800650.html

Ali Montag,CNBC Tue, May 22 For many people just beginning their careers, retirement seems too far away to start planning. But in order to retire in your 60s, you need to get started down the right financial path early by saving and minimizing unnecessary debt , according to Kevin O'Leary, an investor on ABC's "Shark Tank" and personal finance author. "People today don't spend enough time thinking about the future and what they've got to save for when they get old," O'Leary tells CNBC Make It. "It's not easier when you're older to make money — it's easy to make money when you're younger. "You've got to save it while you're making it — that's the whole idea of financial freedom," says O'Leary. That's because your spending, responsibilities and likelihood to take on debt only increase as you get older. "Think about life," O'Leary explains. "You go to college — student debt. Then, you find someone, you get married, you buy a house, more debt — that's called a mortgage. You have kids, more debt — getting them through school." So start planning as early as possible for how to pay off that debt throughout your life, O'Leary suggests. That way, you can be financially secure by the time you retire. When should you aim to have it all paid off? Age 45, O'Leary says. "The reason I say 45 is the turning point, or in your 40s, is because think about a career: Most careers start in early 20s and end in the mid-60s," O'Leary says. "So, when you're 45 years old, the game is more than half over, and you better be out of debt, because you're going to use the rest of the innings in that game to accrue capital." To plan for retirement and pay down debt, O'Leary and other experts offer these tips. 1. Save and invest for the long term "Always ask yourself if you're buying something: Do I really need this? Is this something I have to have? Most of the time the answer is no. So don't buy it," O'Leary suggests. "Instead, invest the money so you can get to that equilibrium a lot sooner." Watching your spending can help you avoid credit card debt, which charges notoriously high interest . And, by using that saved money to invest early, you can take advantage of the magic of compounding , and see your money grow while you sleep. 2. Think carefully about a mortgage All debt is not the same. A mortgage, for example, can be leveraged into an appreciating asset, like a house. "Mortgages are more of a grey area than credit card debt, because real estate can be an investment," O'Leary says. Still, paying off mortgage debt can have benefits. Self-made millionaire and wealth management expert David Bach says paying off your mortgage early can be a key for successful retirement. "I can tell you, having been a financial advisor at Morgan Stanley, my clients who retired at 50 years old, the secret was: They had paid their mortgage off early," Bach tells CNBC Make It. With a 30-year mortgage, make a plan to pay it off in 20, or preferably 15 years, he says. To do that, contribute an extra 20 percent to your monthly mortgage payment, even if it means sacrificing elsewhere in your budget. Unlike Bach, who says "buying a home is the escalator to wealth in America ," O'Leary suggests seriously considering whether or not you should purchase a home in the first place. "In my opinion, most people in their 20s, or even 30s, have no reason to be taking on that kind of debt," O'Leary says. "Homes don't always gain as much value as you expect — at least not anymore and at least not quickly." If you do decide to take out a mortgage to own your home, O'Leary agrees that you should pay it off as quickly as possible. "There's never an incentive to stay in debt. Life is unpredictable," he says. "What happens if you're laid off or incur unexpected expenses elsewhere? Your once-manageable mortgage is suddenly going to seem not so manageable." 3. Make a monthly strategy to pay off debt If you already are in debt, commit to a method for paying it off. Some experts recommend a strategy called the snowball method , which was popularized by "The Total Money Makeover" author Dave Ramsey. First, write out all of your debts from smallest to largest. Focus on the smallest debt, and funnel as much cash as you can toward that debt to pay it off (while paying the minimum balance on the others.) Then, once the smallest debt is repaid, move on to the second-smallest debt. This strategy's benefit is the motivation of seeing debts disappear one at a time. Other experts recommend the avalanche method : Start by listing out the interest rates on your debt and focus on paying off the debt with the highest interest rate. This strategy can help you save by minimizing how much you spend in interest payments over time. 4. Don't neglect your 401(k) (RRSP) If you have a 401(k) retirement plan through your employer, be sure to ask if that employer has any matching offers. If they do, that means the company is willing to match contributions you make to the account up to a certain amount. "The company match is literally free money," personal finance author Ramit Sethi writes in, "I Will Teach You To Be Rich." But one in five people don't contribute enough to get the match, according to data from benefits administrator Alight Solutions. Certified financial planner Eric Roberge says missing out on that opportunity is the biggest mistake Americans are making in saving for retirement. https://ca.yahoo.com/finance/news/kevin-o-apos-leary-apos-120900825.html Cheers,

HuffPost Whether saving up for something bigger, or simply choosing to live minimally, urban dwellers are finding themselves in petite quarters more and more. But these days, tight on space doesn't mean sacrificing on style! With the right amount of planning and practicality, it's easy to see how any size of home can work for you. In partnership with IKEA, here are five smart ways to live big in a small space. Illusions Of More Want to make more out of less? Using a small glass wall to divide up a room can create the concept of having a larger space. Glass means that natural light can still shine through, so your quarters won't feel dark no matter the square footage. And while you're at it, a few accent mirrors are pretty powerful too, for amping up the illusion of light and space. Why not cue up a gallery wall and get creative! Multipurpose Is A Must You're probably a master of multitasking—so why would you expect anything less from your furniture? A stylish table can serve as a dining area when you're hungry, and an office space when you've got work at hand. Smart entertainment units and seating options can provide clever storage solutions, too. Multipurpose wonders like these are a design lover's dream! Open Shelving The concept of what you see is what you get can be crucial for tinier than usual living quarters, in order to avoid a build up of extra clutter behind closed doors. When your space is open, shelves included, you know exactly what you have and where it is. Even better, open shelving is a way to showcase the things that bring love into your home, so break out those trinkets, terrariums and photographs. Up In The Air? When we were kids, bunk bed-living was an exciting prospect, reigning over everything from high above. So why not consider that idea in adulthood for smaller units? A raised bed or loft bed saves an incredible amount of space by providing a quasi-ceiling for a functional den, office area or relaxing nook below. We say playful has never been more practical. Neat and Tidy Organizational guru Marie Kondo lives by a simple purging principle: If it doesn't bring you joy, it's time to say goodbye. Start your spring cleaning engines; this is especially true for tight quarters. A small space that is neat and organized goes a long way towards maximizing your square footage, and creating a zen space. Kondo suggests purging in quiet, family-free situations to create your happiest home. https://www.huffingtonpost.ca/2018/04/16/live-smart-small-space_a_23408751/

Colman & Associates added 7 Marketplace Items

All Marketplace Items