Forget Stereotypes. You Can Afford Real Estate
Last week, Hasbro launched Monopoly for Millennials. It’s an updated version of the classic game, complete with a dismissive tagline: “Forget real estate. You can’t afford it anyway.”
Despite its patronizing tone, Hasbro isn’t far from the truth. Housing prices are higher than ever, particularly in cities like Vancouver and Toronto, and wages simply haven’t kept pace.
When Canada Mortgage and Housing Corporation (CMHC) updated its rules in January 2018, potential buyers were handed yet another hurdle: A “stress test” to ensure lenders can afford their mortgage if rates increase. This limits the buying potential for anyone borrowing money to purchase real estate, even those who have saved for a decent down payment.
Don’t Worry, Millennials: Hard Work and Discipline Still Pay Off!
While the road to owning a home is steeper and windier than it was 25 years ago, it’s still passable.
I recently handled the paperwork for a couple of twenty-somethings buying their first home. Both have full-time blue-collar jobs and had worked hard to save for a down payment.
They were sure they had enough for a one-bedroom condo in Langley, which sells for around $320,000.
However, when they met with the bank, they failed the CMHC stress test. The couple was disappointed, but found a workaround: They included her parents on the title (with a 1 per cent stake) and added them to the mortgage paperwork. The additional financial clout helped them pass the stress test and get approval.
When we finalized the deal, they told me they couldn’t wait to move in and, despite their unconventional path to homeownership, they were proud of the achievement. While, in the end, they had to include family on the title and mortgage, the couple saved for their down payment on their own.
These days, owning real estate is a challenge for millennials. Yet, stereotypes and snarky board games aside, it’s still possible, especially if you look to start out with a smaller property farther away from the city centre.
If you want to learn more about buying or selling real estate, give us a call. At Zancope Notary Public, we provide legal representation for almost any real estate transaction, and more. We can help you navigate your unique path to homeownership.
Be sure to enter our Facebook contest! You could WIN the new Monopoly for Millennials game. Click here to enter!
Contest closes Dec. 11, 2018. Winner will be chosen Dec. 12 and notified via Facebook Messenger.