The Blog

Some people think being a guarantor is like vouching for someone. “Yes, he is a good person and he will pay”. And in a way, this is true, but it is also saying “I am so confident that he will pay, that I will guarantee this. So, if he doesn’t pay, I’ll pay!”  Yes. When he doesn’t pay, you are 100% responsible for that loan whether it is for a car or for a house. To the lender, there is no difference. They will get their money the easiest way they can. And if it is easier to garnish your wages because your son is unemployed, they’ll do it. It doesn’t matter that you have no control or don’t possess the property obtained through the

There have been studies that say around 60% of US personal bankruptcies are due to illness or medical problems. I feel so lucky to live in Canada where we have a much better medical system. In 2020, the bankruptcy rate actually dropped due to all the covid stimulus. For example in Canada in 2019, there were around 140,000 bankruptcies while in 2020, there were only 99,000. Now with the covid stimulus pretty much over, a rising interest rate environment and talk of a recession, bankruptcies will pick up. Luckily for some, their financial woes will not end in bankruptcies. The best defense is to plan ahead. Putting your head in the sand and hoping for the best is not a strategy. There are strategies to

Just when real estate demand has fallen off a cliff, the provincial government has now given details to their mandatory cooling off period. It would be timelier, if this has to do with the hot weather, but it does not. This is to protect consumers in a hot real estate market where they are compelled to write a no-subject offer. Mandatory means that even if it were a no-subject offer, there is still the option to cancel your offer within 3 days but for a fee of 0.25% of the purchase price. That is, $250 for every $100,000. So for a million dollar home, it would cost you $2,500 to back out. Of course, when the environment allows, stick with the traditional offers where you

One term that you might be hearing in the media in regards to mortgages that you never came across before is “trigger rate”. If you have a fixed rate mortgage, this will not affect you. If you have a variable rate mortgage that has payments that move along with the changes in the prime rate, this will also not affect you. However, if your variable rate mortgage payments do not change with the movement in the prime rate, then read on. When a lender produces a payment schedule for your mortgage, they base it on the amortization. That is, how many years at a fixed payment will the mortgage be completely paid off at 25 years or 30 years. In the beginning of the mortgage,

Hope everyone enjoyed their long weekend. The Metro Vancouver real estate sales activities in July were slower than June. In fact, it is at a 22 year low! Home sales plunged 43.3% from last July and were 35.2% below the 10-year July sales average. New listings have slowed but not as much as the sales. This results in a slowly growing inventory. The sales-to-active listings ratios have dropped for all classes. It is 11.8% for detached homes. 20.0% for townhomes and 24.5% for apartments. It was only in April, when these numbers were twice as large. This quick reduction of activity has resulted in month over month price drops in all categories. Detached home benchmark price dropped 2.8%. Townhomes dropped 1.7% and apartments dropped 1.5%.

Recently in the news there was a story about two couples who bought a duplex together in 2001. This was the only way they could afford a place. Since then each of the couple has lost their spouse. The property is now worth an estimated value of 3.29M and one of the two remaining owners wants to sell. The other adamantly wants to stay. As with all these group purchases, it should be viewed as a business relationship. There should be an agreement that clearly states all the roles and duties as well as what happens in various possible scenarios such as when one party wants to sell and the other does not. This will save friendships not to mention large legal bills. You don’t know what people’s

The Metro Vancouver real estate sales numbers continue to slow. For this past June the sales numbers are 35% below last year and 23.3% below the 10-year average. The main reason for the drop in sales is the higher interest rate. Inventory has stayed relatively tight. There were 5,256 new listings which is a 10.1% decrease compared to June 2021 and a 17.6% decrease from May 2022. The total number of listings is 3.8% lower than June of 2021 but a 4.1% increase compared to May 2022. As you can see from the table below, the sales-to-active listings ratio continues to decrease which translates to decreasing property prices. The typical explanation is the downward pressure on home prices occurs when the ratio dips below 12%

The Metro Vancouver real estate sales numbers are in and it is confirming a slowing market. May’s sales were 12.9% below the 10-year May sales average. The lower sales quickly lowered the sales-to-active listings ratios. While generally the narrative is that when the ratio dips below 12% for a sustained period, there will be downward pricing pressures, we are seeing price drops immediately before the 12% is reached. For example, the sales-to-active listings for detached and townhomes are 18.3% and 35.5% respectively, and the benchmark price for detached homes and townhomes have dropped 0.4% and 0.6% respectively over the past month. The sales-to-active listings ratio for apartments is 38.1% and it maintained a 0.4% increase month over month. This result is not surprising since sales

The Federal Government has announced a new vehicle to help first time home buyers that combines the best features of a RRSP and a TFSA. They call it the tax-free first home savings account (FHSA) and the money you put into this account will be tax deductible like an RRSP. The beauty is that when you take the money out for the purpose of buying a house, that money is NOT taxed! The only other vehicle that allows tax-sheltered growth without taxation at the end is a permanent life insurance policy but you have to die to benefit from it. Well, most of the benefit goes to the heirs, so this is better. There is a maximum $8000 per year contribution room which does not