5 Ways to Boost Your Financial Fitness

CoryVance • Apr 03, 2018

Thinking about buying your first home?

The race to home ownership is more like a marathon than a sprint: diligent planning, pacing and strategy are the keys to success. Are you ready to approach the starting line? Here are five ways to shape up and boost your financial fitness so you’re set for success.

1. Check your credit score

First things first: order a copy of your credit report and credit score. Your credit score, which is calculated using the information in your credit report, is what lenders look at when considering you for a mortgage. Your score impacts whether or not you get approved and what interest rates you’re offered.

2. Reduce (or eliminate) credit card debt

Ideally, your credit card balance should be zero. But if, like 46% of Canadians, you carry a balance each month, make it your priority to chip away at it. You’ll boost your credit score while reducing the amount you’re paying in interest, freeing up more cash for saving and investing.

Use one – or, better yet, both – of the following strategies to make a dent in your debt:

• Make more money (i.e., take on a side gig, work overtime hours, pick up odd jobs)
• Save more money (i.e., sacrifice your satellite TV package, swap your gym membership for running outdoors, cut back on eating out)

3. Bulk up your savings

Now’s the time to save aggressively, stashing that cash in a registered retirement savings plan (RRSP) or tax-free savings account (TFSA). Use automated savings to ensure that money goes straight from your checking account to your savings, investment accounts or both.

Remember: As a first-time homebuyer, you can withdraw money from your RRSP to put toward a down payment. (Generally, you’ll have up to 15 years to pay it back into your RRSP.)

4. Stick to a budget

As points 2 and 3 illustrate, getting financially fit takes determination and commitment. It can feel less overwhelming when you’ve got a snapshot of goals and actions right at your fingertips. Sit down with your partner to create a monthly budget. And stick to it.

A smartphone app can be a game changer in keeping you organized, accountable and on track with your financial fitness plan.

5. Keep your eyes on the prize

Stay inspired, motivated and positive by remembering why you’re working so hard to boost your financial fitness: to buy your first home!
Crunch preliminary figures online to come up with ballpark estimates on how much home you can afford.
Raise your real estate IQ by watching HGTV shows, researching neighbourhoods, perusing listings and attending open houses.
That will make you a more educated shopper once you’re ready to enter the market qualified with a mortgage pre-approval. Do your research now, so you can hit the ground running when you’re ready to buy.

This article was written by Genworth Canada’s Vice President Business Development, Marc Shendale.

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CORY VANCE

403-614-9211

cory@coryvance.ca

What You Need To Know About Online Mortgage Calculators

By Cory Vance • 23 Apr, 2024

You’d think an online calculator is a pretty straightforward device, one that you should be able to place your confidence in, and for the most part, they are. Calculators calculate numbers. The numbers are reliable, but how you interpret those numbers, not so much, especially if the goal is mortgage qualification. If you rely on the numbers from a “What can I afford” or “Mortgage Qualification” calculator without talking to an independent mortgage professional, you’re going to be misinformed. Don’t be fooled. Even though an online mortgage calculator can help you calculate mortgage payments or help you assess how additional payments would impact your amortization, they’ll never be able to give you an exact picture of what you can afford and how a lender will consider your mortgage application. While mortgage calculators are objective, mortgage lending isn’t. It’s 100% subjective. Lenders consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase. Then, they will compare that with whatever internal risk profile they are currently using to assess mortgage lending. Simply put, they don’t just look at the numbers. An online calculator is a great tool to help you run different financial scenarios and help assess your comfort level with different payment schedules and mortgage amounts. However, if you rely on an online calculator for mortgage qualification purposes, you’ll be disappointed. The first step in the mortgage qualification process is a preapproval. A preapproval will examine all the variables on your application, assess your financial situation, and provide you with a framework to buy a property based on your unique circumstance. Securing a preapproval comes at no cost to you and without any obligation to buy. It’ll simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. Something a calculator is unable to do. Please connect anytime if you’d like to talk more about your financial situation and get a preapproval started. It would be a pleasure to work with you.

Understanding the Recent Housing Affordability Measures in Canada

By Cory Vance • 19 Apr, 2024

In recent years, housing affordability has become a significant concern for many Canadians, particularly for first-time homebuyers facing soaring prices and strict mortgage qualification criteria. To address these challenges, the Canadian government has introduced several housing affordability measures. In this blog post, we'll examine these measures and their potential implications for homebuyers. Increased Home Buyer's Plan (HBP) Withdrawal Limit Effective April 16, the Home Buyer's Plan (HBP) withdrawal limit will be raised from $35,000 to $60,000. The HBP allows first-time homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to use towards a down payment on a home. By increasing the withdrawal limit, the government aims to provide young Canadians with more flexibility in saving for their down payments, recognizing the growing challenges of entering the housing market. Extended Repayment Period for HBP Withdrawals In addition to increasing the withdrawal limit, the government has extended the repayment period for HBP withdrawals. Individuals who made withdrawals between January 1, 2022, and December 31, 2025, will now have five years instead of two to begin repayment. This extension provides borrowers with more time to manage their finances and repay the withdrawn amounts, alleviating some of the immediate financial pressures associated with using RRSP funds for a down payment. 30-Year Mortgage Amortizations for Newly Built Homes Starting August 1, 2024, first-time homebuyers purchasing newly built homes will be eligible for 30-year mortgage amortizations. This change extends the maximum mortgage repayment period from 25 years to 30 years, resulting in lower monthly mortgage payments. By offering longer amortization periods, the government aims to increase affordability and assist homebuyers in managing their housing expenses more effectively. Changes to the Canadian Mortgage Charter The government has also introduced changes to the Canadian Mortgage Charter to provide relief to homeowners facing financial challenges. These changes include early mortgage renewal notifications and permanent amortization relief for eligible homeowners. By implementing these measures, the government seeks to support homeowners in maintaining affordable mortgage payments and mitigating the risk of default during times of financial hardship. The recent housing affordability measures announced by the Canadian government are aimed at addressing the challenges faced by homebuyers in today's market. These measures include increasing withdrawal limits, extending repayment periods, and offering longer mortgage amortizations. The goal is to make homeownership more accessible and affordable for Canadians across the country. As these measures come into effect, it's crucial for homebuyers to stay informed about the changes and their implications. Consulting with a mortgage professional can help individuals explore their options and make informed decisions about their housing finances. If you're interested in learning more about these changes and how they may affect you, please don't hesitate to connect with us. We're here to walk you through the process and help you consider all your options and find the one that makes the most sense for you.