How Low Is Too Low?
There has been a lot of news about the Minister of Finance, Jim Flaherty, contacting lenders and asking that they stop offering consumers a discounted interest rate. Flaherty is quoted as calling these offers a race to the bottom and the minister is expressing deep concerns about the high level of consumer debt. The question on most peoples minds seems to be... is there such a thing as an interest rate that is too low?
It depends on who you ask.
To most Canadians the most important question we ask ourselves is 'How much will I be out of pocket for this purchase each month?'. The interest rate we pay has an impact on those monthly payments, and when you combine it with the reduction in maximum amortization allowed, lower rates means greater affordability. Or does it?
Some analysts are expressing caution when Canadians are making large purchases to think beyond the costs today. It is important to have a contingency plan in place for when rates do rise, or you could be literally left out in the cold.
There is no question that prudent planning will see most of us through future rate increases, or sudden changes in income. The difficulty is finding an advisor that can help you navigate these difficult questions, and that is exactly what a mortgage broker can do for you. Don't be afraid to ask questions, and talk to your advisor about what your short and long term financial goals are. These are fundamentally important to your future.
A Book worth reading.
It is not often that a book about mortgage financing hits the marketplace that explains, in plain language, the options available to Canadians who are considering investing in property. Earlier this year that is exactly what happened with the release of "INVESTOR FINANCING - 7 Secrets to getting all the money you want" written by Dalia Barsoum and Enza Venuto. With over 45 years of combined experience in the banking and finance industry this is an insightful book that is a must read for anyone who is serious about building a property investment portfolio.
To get a copy of this great read for yourself,click on the image or the link above to order.