There are have many warnings made by bankers on the fact that consumers should be wary when taking household debt, Canadians are gaining an appetite for risk and taking on longer-term mortgages.
The Canadian Association of Accredited Mortgage Professionals released a survey on Monday that shows 18% of mortgages are long-term compared with 16% a year earlier and 9% in 2007.
The problem at hand is that if consumers stretch themselves out too far now, it could become a problem later on in the future.
Canadians are more optimistic in buying a home in the three years this survey has been conducted.
Home sales in 2010 are expected to increase by 7%, from an earlier forecast of 5.2%.
New sales forecasts put activity on par with 2004 levels, however it is still below levels seen in 2005 to 2007, the peak years of the market.
Do not stretch yourself too far, find the median and live within it. In other words, live within your means.
It is better to slowly upgrade your lifestyle than to jump into one heads first and find yourself struggling to keep it up.
This is only to raise awareness on the fact that low interest rates will not last, and if you happen to have a variable rate mortgage, then your low rate will definitely change in time.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
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