I am always trying to bring information and tools to any one that will listen.  Things that will help them make their housing and even, money, decisions.  Sometimes they are video, often they are articles.  But this particular article caught my eye:  Globe and Mail:  Housing market correction “appears to be under way’.

Let me be the first one to thank you for stating the obvious.  This happens every time.  Most media outlets are about 6 months behind reporting and sort of real estate market information.  Whether they don’t get the stats until months later, or their sources have no clue, I am not sure.

In my opinion, in BC, there has been a slow “Cooling Off” for the last 18 months for everywhere in BC except North Shore, Vancouver and South Surrey/White Rock.  As many of us know, a lot of the demand in these markets was driven by foreign investment.  These markets, not immune to the current economic climate, have slowed to some degree now as well.  Now I know this is a generalization of our real estate market, but I think it gets my point across.

Although the new mortgage rules have had some effect, this slow down has been happening for a while.

Here is what I think you need to know.

1)  The people that needed to put less than 20% down, and now can’t qualify for anything with a 25 year amortization, is very small.

2)  If you want to refinance your property, be aware of the current value.

3)  It is all relative.  Know that if your townhouse is 10% lower in value than it was last year, so is the house you are buying too.  As always, just be careful if you are moving downsizing.

4)  Real estate is a long term investment.  When buying, plan for the long term.

Buying your first home is scary at the best of times, but with property values the way they are, mistakes have never been more costly.

Think about it, if you bought in 2007, and found out it was the wrong house, or you couldn’t really afford it…you could just flip the house, make $10,000 and no one ever got hurt.

Well, now.  This is not the case.  It is not as easy as “flipping” a home to get out of trouble.  Now you could either be stuck with a place you hate, or could cost over $20,000 to make the problem go away.

So what can you do to protect yourself?  Watch this video

So, I came across this article in the Financial Post:  Why it’s better to rent than buy so of course, it peaked my interest.

Although I don’t necessarily disagree, I was curious as to why David Kaufman thought as such and you know what, he has some great points.  I think when the majority of young Canadians, left to their own devices, will take the maximum amortization, the smallest payments, refinance every 3.4 years and never pay their mortgage down.  They will incur all of the costs of home ownership, but never really see any benefit.

But, these people also don’t set goals.  They don’t have a payment plan.  They don’t have someone advising them on debt management on a regular basis.

So although I agree with many of the things David Kaufman has said, here is another perspective.  What if you buy a home, set up a payment plan, and have your mortgage paid off in 15 years, as opposed to 25, 30…40.  Then, this is when being a home owner wins.  In 15 years, no rent payment, no mortgage payment.  MORTGAGE FREEDOM!

I guess what I am trying to say, the benefit to mortgage over rent, is that if managed properly there is an end date with a mortgage, and it can be sooner rather than later…with rent, there is never an end date.

Buying your first home can be pretty indimidating.  So many numbers, so many things to think about.  When budgeting for your home purchase often people get caught up in only finding out what their purchasing power is.  They only think about what they can afford and the monthly payments, and don’t think about the up front costs.

Well, look no further.  I have put together a video of all the costs you need to be aware of when purchasing Real Estate.  If you like it, please feel free to share it with your friends and family.

Closing Cost Video Here

Great article in The Star last week. The one point I want to really highlight is the first one “Knowing Your Long Term Goals”.  This is so important!  What is the purpose of this property?  Is it a stepping-stone, or a long-term home.  

I think another key, is making sure they are working with a professional, a serious professional, someone that is actually qualified to manage this huge debt.

Finally, I think many people lose sight, or don’t even know what to focus on when thinking about their mortgage. To me it is simple, especially for the average Canadian who’s goal is to pay down this debt as quickly as possible.  Focus on two things:

1) Are your payments comfortable?

2) Can you make your amortization smaller?

That’s it.  Be comfortable with your payments and get that mortgage paid off asap.  The sooner it is gone, the sooner those mortgage payments can be put back in your pocket.  The best way to do this…a payment plan!

This is a pretty serious question that you need to ask yourselves.  According to this article I read on www.globalnews.ca there is a chance we could be going there, and the key is debt levels…personal debt levels.  My question to you is, what are you doing about your current debt situation?  Here are some simple ways of paying your debt of faster:

1)  Don’t spend more than you make…SERIOUSLY!  When you are out window shopping, see something you like, and know you don’t have the money today, but get paid in a couple days…THIS DOES NOT MEAN PUT IT ON YOUR CREDIT CARD.  It means, walk away.

2)  Make sure you debt level is lower this month, than it was last month.  Even if it $1.00.  Obviously you would like to pay your debts down faster than that, however, if even in the worst months if your debt load is even $1.00 lower than it was the month before…you have made progress.

3) Work with a professional to manage your debt.  Most people will take out $10,000 in RRSP’s and get a Financial Planner to manage their assets, but then carry over $300,000 in debt and not have anyone manage that…seems a little silly to me.

If you are carrying any debt at all, including a mortgage (a mortgage on your home is still bad debt!), please give me a call so we can help you protect yourself against another recession.

Over the last couple of months, I have more and more clients taking a step back from real estate.  With the threat of a “correction” and price flat-lining…people are weary should they even buy at all right now.

Like many other markets, I think where people can get themselves in trouble is short term…making the “quick buck”…however, as history shows us…Real Estate is a solid long term investment.

With all of the doom a gloom about Real Estate, I like how DBRS who analyzes risk, say that the Canadian Real Estate market, looks bright, in this article in the Globe and Mail.