May 23: Canada’s socioeconomic inequalities are showing because of COVID-19
Local residents pick asparagus as they work at Dyas Farms in Sevenscore, Britain April 16, 2020. Picture taken April 16, 2020. By Dylan Martinez/REUTERSMy finances aren’t rock solid, but could now be a good time to buy a home?a home with the minimum down payment. So warns Canada’s most vocal housing official.
"A first-time home buyer purchasing a $300,000 home with a 5-per-cent down payment stands to lose over $45,000 on their $15,000 investment if prices fall just 10 per cent, which we are forecasting,” Evan Siddall, chief executive of the Canada Mortgage and Housing Corp. , told a parliamentary committee earlier this week.
This fate could affect a large cohort if they’re forced to realize those losses. An estimated one in three first-time buyers and one in eight new mortgages have less than 10-per-cent equity. Most such folks are putting down just 5 per cent, which, after default-insurance fees, leaves them almost 100-per-cent financed.
If you’re anxious to own a home, I don’t blame you. But if you’re not rock-solid financially, renting a bit longer is sensible risk management.
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