Canadian Finance

Another day, another point of view about Finance Minister Jim Flaherty's warning that the government is considering making changes to mortgage lending rules to avoid a housing bubble. Recently, I wrote about a mortgage broker who thought that tightening mortgage requirements would have a negative impact on home buyers and thus the overall housing market, which would in turn impact the economy.

While some buyers might feel "punished" by the tightened requirements, the other side of the coin is that Flaherty and the government might be saving a lot of people from future personal debt crises, which again, would impact the economy.

So what to do?

Obviously, low interest rates are a boon for those in the market for a mortgage, but it's important to remember that the current market is a temporary thing. If you’re in doubt, a mortgage broker can help you figure out how much you can comfortably afford to borrow.

As we begin 2010, I was not surprised to find that a survey of editors at Canwest News Service picked the recession as the top business story of 2009. With the recession casting a long shadow of uncertainly, it was the single story that had the most impact from coast to coast.

According to experts, the recession is now over, but that doesn't mean that the average Canadian will see a change in their financial situation in the coming year. Although, housing values are expected to continue to increase.

With similar cultures, it can be difficult to remember that the United States is a different country than Canada. The sub-prime mortgage meltdown in the United States showed the world the differences between our respective banking and lending practices. It's good to know that it's unlikely that Canada could find itself in a similar situation.

Wishing you prosperity and health for the next year!

I was interested to see that according to a new report from Statistics Canada that Canadians are deeper in debt than ever. According to the report, in the third quarter of 2009, both household net worth and household debt - mostly mortgages and consumer credit - increased.

This has resulted in a debt-to-income ratio of 145 per cent, which translates into $145 of debt for every $100 of income. That's a scary thought. Although, not as scary as the debt-to-income ratio of 175 per cent in the United States.

The good news is that economists say that while personal debt is up, record low interest rates are keeping debt loads manageable. They also say that the debt-to-income ratio is expected to get better as the economy recovers.

While the Bank of Canada has pledged to keep the benchmark over-night lending rate at 0.25 per cent for the first half of 2010, they are urging home buyers to be prudent with the amount of mortgage debt they are carrying.

These certainly are in interesting times.

Is it that time again? It seems that the year is barely started and before you know it it's already over. This can mean only one thing: it's time for the top 10 lists to begin.

This week Yahoo! Canada 2009 Buzz Index released their list of Canada's Favourite Online Topics as searched by millions of Yahoo! Canada users.

The top Canadian search term of the year was NHL, which surpassed Michael Jackson who placed number five on the list.

In finance related searches, MLS was the prevailing search term, followed by mortgage calculator, which placed in the fifth spot.

While real estate agents and mortgage brokers have been saying that the residential property market is hot, these results suggest that consumers are indeed being lured by the current market and attractive mortgage rates.

Thinking ahead to next year, at this point I wouldn't be surprised to find that Twilight is the top search term in every category. Happy searching!

I was thrilled when I was finally able to pay off the last of my student loan. About a year later I started getting calls from a collections agency asking why I had stopped making payments on that loan. Apparently, there had been a mistake at the bank and my file ended up in the "collections" pile instead of the "paid off" pile.

You've probably heard it said before, but this is exactly the reason why it's important to periodically check your credit report for mistakes, especially if you're planning to apply for a large loan or mortgage. While mistakes do happen, it's up to you to correct them.

In Canada, Trans Union and Equifax are the two companies who handle credit reporting. Both companies will let you check your credit report and score online for a fee, but for free you can get a report sent to you by regular mail.

It's important to give yourself enough time to check and fix your credit score before applying for your home mortgage.

Word on the street has it that some 30 new applications for banking and trust licences are patiently waiting for the seal of approval from the Office of the Superintendent of Financial Institutions Canada.

It feels like everywhere we go these days, we find someone else trying to cash in on the financial services niche to increase their bottom line. Already we have retail cards and credit cards offering special offers and rewards to get our spending dollars. Canadian Tire MasterCard being at the top of the list, but for over a decade, Loblaws has been offering no service fees on bank accounts and encouraging shoppers to add an unbeatable, eatable mortgage to their grocery list.

Enticing customer loyalty by offering specialized credit card offers or other financial services is not a new trend in Canada. With 30 potential new players in the field Canadians are bound to see a few more balance transfer and consolidation offers arriving in the mailbox, both from current institutions trying to hold onto their market, and new arrivals hoping to build a business.

Well, there is one good thing about new competition: the consumer always wins. That's  why it is important to work with a professional mortgage broker to negotiate a great rate on your next mortgage.

During the economic downturn in Canada, studies revealed that far too many Canadians were caught with too much debt and not enough savings. The Ontario school system is now taking on the challenge of teaching our kids some financial literacy, in a program to be rolled out in September 2011.

Starting in grade four and straight up to grade twelve, the school system will be helping children learn to use and manage their money. Understanding how money works, how credit cards and mortgages work and overall financial well-being is an integral part of creating lifelong habits that will boost the next generation, and hopefully give our young people a strong advantage when it comes to managing student loans, saving for that first car and surviving between paycheques.

Long overdue, this program has finally caught up with the marketing and advertising beseeched upon our youth via internet and televisions, and updates the current "how to balance your chequebook" criteria to provide valuable skills that every student will indeed use.