Mortgage 101 with Clinton Wilkins & Todd Veinotte

Chris Johnson from Sagen joins us on Mortgage 101 to discuss the importance of high-ratio mortgage insurance, which allows buyers to access homeownership with as little as 5% down, making it more affordable for Canadians. 

Derek Bellefontaine, Real Estate Appraiser, with Mari Tech joins us as our guest to discuss the role of appraisers in valuing homes, which is crucial for purchasing, refinancing, and separations.

Special host Dan Ahlstrand joins Clinton Wilkins to kick off Financial Literacy Month, emphasizing education on income, assets, and credit. 

Clinton Wilkins reflects on this year's discussions of the impact of interest rate cuts on consumers, noting that rates have declined by 0.25% and are predicted to reduce further by 125 to 175 basis points by the end of next year. This could potentially bring prime rates to around 4%. Clinton also highlights the importance of being organized and prepared for real estate transactions, emphasizing the need for flexibility and the right professionals. 

Your host, Clinton Wilkins recaps this year's conversations with Todd Veinotte on the housing market in Halifax. Clinton reminds us of the need for densification due to urban sprawl and limited land availability. In 2024 we have multiple offers, but less frequently as in 2021-2022. Prefabricated homes are considered a potential solution to reduce housing costs, with economies of scale and controlled environments being key.  Clinton recaps his conversation earlier this year with local realtor James Dwyer who notes a 20% increase in listings and sales, with entry-level properties remaining competitive. 

This recap episode of Mortgage 101 highlights concerns about increasing debt levels in Canada, with Equifax reporting that mortgage holders are missing payments. We look back at one of the show's guests, Sandi Burns, from Manulife Bank, who noted that BMO exited the auto loan industry due to high arrears, predicting a peak in 2025-2026. Many Canadians are refinancing at higher rates due to pandemic-era lows, and retirees on fixed incomes are struggling. Clinton highlights what affordability means in the 2024 housing climate and advises on avoiding unnecessary debt to qualify for a mortgage.

In early 2024, the Ontario real estate market slowed significantly, while Nova Scotia's affordability stood out with an average home price of $500,000 in Halifax. Building costs and labour have surged due to inflation, affecting both new construction and renovations. First-time homebuyers are increasingly opting for starter homes, often in need of repairs. Atlantic Canadians are particularly burdened by debt, with 70% expressing concern about repayment. Despite high interest rates, there's cautious optimism about potential rate reductions, with predictions of a 200 basis point reduction by 2025. The housing market remains a seller's market, with a need for a more diverse inventory.

How affordable is the Nova Scotian market? Real estate is more affordable in Nova Scotia compared to other markets. Clinton and Todd reflect on the challenges of buying starter homes, citing increased property values and stagnant income growth. 

So the interest rates are down, and I can finally buy a home - now where do I buy? Clinton and Todd discuss the Halifax housing market and deciding on a location in terms of housing types,  commuting and fuel costs, natural disasters, insurance, and the potential for lenders to refuse mortgages in high-risk areas. 

Clinton and Todd discuss the Bank of Canada's recent rate cut of 25 basis points, with predictions of further cuts in October and December, opening up the market for some buyers.