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Mortgage options fueled by increased home buying: firm
Ottawa Business Journal Staff
Tue, Mar 13, 2007 12:00 PM EST
Ottawa Business Journal
Staff
Home sales increased in almost every province January, fuelling continued demand for flexible mortgage options that make buying a home easier for Canadians.
According to a recent survey conducted by Canada Mortgage and Housing Corporation (CMHC), 40 per cent of Canadian mortgage consumers are willing to make higher mortgage payments if it means they can buy a home sooner with a smaller down payment. Thirty per cent of Canadian mortgage consumers would also take longer to pay off their mortgage if it would improve their cash flow.
"Home ownership is important to Canadians, but so is having the freedom to meet other financial demands," said John Schipper, senior vice-president, GMAC Residential Funding. "Thirty per cent of all our I secure approvals have had amortizations greater than the traditional 25 years since we introduced this feature to our mortgage product. By providing Canadians with up to 100 per cent of the value of their home, they now have the ability to own a home sooner, but keep their monthly payment lower by choosing a longer amortization."
The CMHC survey also shows that 75 per cent of Canadian mortgage consumers want to pay off their mortgage as quickly as possible, and 50 per cent plan to use any extra money to pay down their mortgage principal.
"Canadians increasingly see the value of entering the housing market from a financial perspective, and want to take advantage of it by getting into the market sooner," continued Mr. Schipper. "Home ownership is a great way to build equity, and Canadians, particularly first-time buyers, make the most of their investment by using their free cash flow and any extra money to pay of their mortgage quickly, which is sound financial planning for any stage of life."
Whether shopping for their first mortgage, renewing an existing mortgage or refinancing, Canadians are increasingly exploring their options.
Seventy per cent of mortgage consumers are checking competitive rates, getting information from other lenders or shopping for options, and 27 per cent are turning to a mortgage broker for advice on what mortgage is best for them, according to the CMHC survey.
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