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Tag: Debts

Looking For Alternatives To Bankruptcy In Canada

Bankruptcy Alternatives in CanadaGoing for the personal bankruptcy may often be an option that people in Canada think they have to take when they felt severely in debt. However, before taking this route that declares you bankrupt, it’s wise to find out an objective opinion in the view of your financial situation. There are variety of alternatives to bankruptcy in Canada that you can avail throughout Canada in all provinces and territories.

Bankruptcy Alternatives in Canada

Following are the personal bankruptcy alternatives that are available in Canada:

  • Debt Consolidation Loan
  • Debt Management Program (Payment Consolidation)
  • Orderly Payment of Debts (OPD); please find out its availability in your province prior to taking it.
  • Consumer Proposal

You are facing the possibility of personal bankruptcy but are not willing to give in yet; is it so? There are several alternatives to bankruptcy in Canada. Finding out what is right for you is an important task that you can talk with a professional about the options for you. There are trained peoples like bankruptcy lawyers that can help you in making the decision about what alternative may be right for you.

You will find most of the creditors who are willing to work with you because they will make more money helping you solve your debts than to have it written off in a court of law where they will not recoup their losses. In other words they do not want to write of the loans. When you are seeking help to keep from a bankruptcy you will want to either hire a lawyer or a professional negotiator. A professional negotiator can be found at nonprofit organizations for debt counseling. You can also find these individuals online or in the phone book. You will of course want to check references to make sure you are dealing with a reputable company. Those who are in debt know that creditors will send them to collection services that will hound the person. In order to lower stress it is important to have someone field the calls while you are trying to negotiate terms you and the company can live with.

It can be difficult to find the money to afford a bankruptcy lawyer especially when you are already struggling so remember the nonprofit organizations do hire professionals to help you. A credit negotiator can establish a deal for a smaller cash payment to help you settle the claim against you from that company. You may pay less on a monthly basis or you may be able to give them a lump sum to make the company settle without the bankruptcy. This lump sum can have you pay off the debt so you can concentrate on other debts.

The percentage you may have to pay could just be the balance without the attachment of interest if you can pay it right away. They may invoke an Individual Voluntary Arrangement that states you have a certain period of time to pay of a percentage of the loan.

You will want to try alternatives before seeking bankruptcy because it can affect your credit score. If you still have decent credit is behooves you to try an alternative such as refinancing your loans to perhaps one over all loan. You may find a lower annual percentage rate with the consolidated loans and still save your credit.

There are alternatives to bankruptcy in Canada the trick is to know where to find them. You do not want to listen to bad advice so you should seek a reputable company even a nonprofit organization that will give you the advice and guidelines that you want to avoid bankruptcy.

For update and authentic information about alternatives to bankruptcy, you should consider reading here at Office of the Superintendent of Bankruptcy Canada. It’s strongly recommended to adopt best possible alternatives to bankruptcy in Canada that you can afford in relation to your personal financial situation; it’s always in your best interest to check out and find your other options before declaring personal bankruptcy. Moreover, you should consider finding what assets you may have to give up in case you are going to file for bankruptcy and how long it will take to rebuild your credit history after the bankruptcy process is completed.


How To Rebuild Your Credit History In Canada

Looking to improve your credit rating after having bad credit situation due to poor payment history or else, previous insolvency, bankruptcy or consumer proposal. Remember, there is no any quick fix but you can get back on track if you follow the right path. In your situation, the best solution is a prepaid credit cards or a secured credit card that are the easiest to obtain. It can help you to establish or rebuild your credit history, and let you access to credit when you need it.

If you’re a new to Canada having no credit history or if you’re a Canadian citizen trying to rebuild your credit rating for your ruined credit history, it’s not always easy to get approved for a credit card, where secured credit card is an easy to get credit card in all kinds of credit ratings and financial difficulties and its the one you need it to establish or rebuild your credit history. There are plenty of secured credit cards from various banks and non-banking financial companies that are being offered in the Canadian market today. You should be smart in selecting a good secured card as secured credit cards usually require processing charges, application fees and annual fees  where regular credit cards don’t.

Here’s an article that specially selected to reproduce it here from Financial Consumer Agency of Canada to help website visitors looking to get an authentic answer from a reliable source on; how to rebuild your credit history?

Rebuilding Your Credit

Even if you have made money mistakes in the past, you can rebuild your credit history and become a borrower in good standing. It is important to have a good credit history if you want to borrow money. The better your credit report and score, the better the terms of your loans and credit will be (e.g. lower interest rates).

However, you have harmed your credit history and score if:

  • you did not pay at least the minimum balance on your debts
  • you made late payments
  • you went over your credit limit
  • you missed one or several payments
  • you stopped making payments altogether
  • you have too much credit and you use it
  • your debt was referred to collection
  • you made a consumer proposal
  • you declared bankruptcy.

A bad credit report and score can mean you do not get approved for a loan, or you do not receive the best loan terms (e.g. higher interest rate).

How to rebuild your credit history

  1. Apply for a secured credit card. Secured credit cards require you to leave a deposit with the credit card issuer as a guarantee. The deposit is usually equivalent to the card limit, but can be higher. For instance, if you want a limit of $500, you may be asked to leave a deposit of $500. Once you’ve shown that you pay the balance regularly and have built a payment history, you can ask that the security requirement be dropped and that the deposit be returned.
  2. Make at least the minimum payment by the due date. If you cannot pay off your balance in full each month, make at least the minimum payment on each of your debts on time. Late payments will count against you and negatively impact your credit score and credit report.
  3. Do not apply for too many credit and loan products. Having too much credit can also negatively affect your credit report. Keep your available credit at a minimum. Do not fill in too many applications for credit and loans because every time you do, your credit history is checked. Each credit check can affect your credit score.
  4. Review your statements. When you are in debt, avoiding your monthly statements may cost you. Mistakes happen and you only have a limited time to correct them. Always review your statements to make sure there are no transactions charged in error and that your payments are recorded correctly. Report any mistakes as soon as possible.
  5. Check your credit report annually. You are entitled to receive a free copy of your credit report annually from each of Canada’s two credit rating agencies, Equifax and TransUnion. Check your credit report annually for errors and get them corrected as soon as possible.

Prepaid cards do not help you build credit. You may choose to use a prepaid card as a payment option, but its use is not tracked by the credit rating agencies.

Productive Suggestion: Use credit responsibly

“There are no quick fixes to repairing your credit history. You have to prove you are a responsible borrower to lenders, and that may take time. Whether you are rebuilding your credit history, or trying to maintain a good credit score, you should always use credit responsibly.”

Alternate to secured credit cards to rebuild your credit history

How to repair your credit in Canada or rebuild your history? In the past secure credit card is the only option available but now Canadian market is offering another innovative alternate to establish, and or rebuild your credit history is a Credit Repair Loan that also works in bankruptcy and consumer proposal issues beside don’t overburden their customers in relation to high interest rate secured credit cards that ask for the cash “upfront” at the time you receive your credit card. As many of such consumers trying to rebuild their credit may have a difficult time doing so.

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Paying Off Debt vs Savings

Debt vs SavingsWe’re sick of hearing about the tough times that we’re living in. It was a good few years ago since the market crashed, and as people continue to look for solutions the debt or savings question can be a frequent debate. But, which makes more sense – paying off debt or savings? And how do Canadians go about defining their long-term financial policy?

Really, this is a no-brainer if you’re thinking about it off the bat. Getting rid of any debts that you have ensures that your possessions are not at risk and you know that you can’t be hit with a big interest bill. While it may feel nicer to have a few thousand dollars saved up, you have to think that money will be saved long-term if your debts are paid off now. But, when times are tough, we like to save. Debt vs Savings is what that financial industry pay most concern, let’s see how it help an ordinary person in getting a right path towards a better financial future.

Saving in Canada

The Tax Free Savings Account that was announced last year was applauded as a novel approach for helping the population to save. Receiving tax benefits, you are able to save up to $5,000 a year so long as you are aged 18 or older. What this meant to Canadians is that a substantial amount could be saved up – tax free – and this was big news.

But, what it also meant was that people started to take a look at GIC Investments. With the market crashed and more unpredictable than ever before, the stock market wasn’t the answer and Guaranteed Investment Certificates with their guaranteed return seemed a solution. What this meant is that taking the time to save in this way was financially rewarding for citizens creating an emergency fund.

How does this help the credit card problem?

Whether you like to save or not, there’s going to come a time when your debts need paying off. By getting a guaranteed return on your money, you will have a fund to call on, but what tends to happen is that the debts will soon pile up. So, while you stockpile in one place be sure to keep an eye on what is going on elsewhere on an issue to get an efficient decision while comparing between paying off debt vs savings in Canada.

Interest rates are your worry here, but if you can find the lowest APR and BTR credit cards online you will be able to move all your debts to make them more manageable. By planning an attack on your debts you will always be better placed to beat them. While we all want to be debt-free, paying them off can seem a thankless task. Two options include:

  • Change your outgoings – While this may sound obvious, it’s the easiest way to make a break towards being debt-free. Savings are important, but not when you have debts to pay. What you first need to do is use a service to enhance any saving accounts, lower what you need to pay on your credit cards and cut money from your mortgage rates. By cutting dollars off your monthly outgoings, you will have more to chip away at debts.
  • GIC Investment Loan – A great way to kick-start your savings, get money to fight your debts and boost your credit rating is through using a service like Lend It Financial. What you can through this method is re-establish credit history by getting a loan that is insured and invested into a GIC. From here you build a profile and earn money off your investment for an interest rate of around 12% from the company.

It’s funny how much better we feel knowing that there’s an emergency fund in a savings account, but by paying off debts now you will spend less in the long-term. While the right answer changes depending on circumstances, there are many things we all can do to lower our credit card debts to enjoy savings to hold for our future or invest it where it better grow.


Canadian Family Debt-To-Income Ratio Hits Record High

Do you know your debt-to-income ratio? Find out and know your creditability and if its worst like most of the Canadians then improve it without delaying.Does the year 2012 of borrowing trouble? Family debt-to-income ratio hits record high in Canada! Debt rises 78% in last 20 years, according to The Vanier Institute of the Family 12th annual assessment of Canadian family finances report; the average Canadian family debt including mortgage loan has reached $100,000. The average Canadian family debt-to-income ratio has now hit a record 150% that means Canadian families owe $1,500 for every $1,000 in after-tax income. We are not going to discuss here about what happens next year, because it comprises lot of inside economic indicators and out side world crises as USA and UK are also reflecting nearly same negative trend. Yes, we have got a positive thing with us that benefit all the individuals, we still have a very low interest rate in Canada and it feels that Bank of Canada want it to continue it’s low rates in 2012. Time will definitely disclose about the report how much it compares of apples and oranges. Dealing with a high debt to income ratio is not very difficult and as a sensible individual you have to safeguard your personal finances by reducing your extra spending and saving for the future, and you can do it. Lets discuss our monthly personal and household spending in relation to our income that demands us to reduce our debts with a productive option of saving into investments.

Simple spreadsheet that will help calculate your debt to income ratio.Do you know your debt-to-income ratio? People usually want to use the debt to income ratio calculator, although Its a simple calculation that an individual can do it by using excel spreadsheet or by hand, it will help you in finding out how much you’re paying in relation to your earning each month and whether your ratio of debt to income is acceptable or high. Debt-to-income ratio is a percentage of your income you owe in debt or debt payments and its one of the best ways to know whether a person is in a good or bad financial position. You require a good financial position to borrow money, spending too much on debt and other financial commitments will result in bad credit, it will drop your creditability and a chance to get credit when in need. All the banks, financial institutes and lenders require your debt-to-income ratio to determine your ability to repay debt, lower ratio means you hold better chances of repaying your debt. Where higher ratio means you would consider being a credit risk that could result in dis-approval of your loan or mortgage. There are various lenders specially dealing in mortgages also calculate Gross Debt Service Ratio (GDSR) and Total Debt Service Ratio (TDSR) to analyze your affordability to take an additional debt. In view of various financial experts, your debt-to-income ratio should not exceed one third of your gross income.

You probably have taken some kind of debt in your life and it’s quite normal, whether it’s a mortgage, credit card, car loan, student loan, payday loan, personal loan, or any sort of due bills you may have. Debt can be divided into two types in relation to rate of interest, high and low interest rate debts; Where credit cards and payday loan debt belong to high rate of interest and these are the debts you should always consider to pay off as soon as possible, preferably before due dates, that way you can save your self from getting into speedy and extra debt burden.

Reducing your debt mean saving that you can further invest to get more future benefits, there are great number of individuals that prefer investing their money into government backed investment offers to get high interest savings programs like Tax Free Savings Account (TFSA), Registered Retirement Savings Plans (RRSP), Guaranteed Investment Certificates (GICs), Exchange Traded Funds (ETFs), Stocks, Bonds, Mutual Funds and other to enhance and save money for various future tasks and most probably for retirement purpose. Here you can get benefit from your lower rate debts while investing them into those investments, which deliver higher returns. It is further advisable to all the individuals to consider all the factors before making decision to go with these benefit programs because there are two possible things you must consider; you should calculate difference between your investment rate of return and interest rate over your various debts. A positive difference between two will help you in making your decision, if paying off debt would help you in reducing your financial burden while enhancing your monthly saving amount then it’s a best deal to consider.

Personal debt management is not difficult because you can easily manage your own debts according to your situation and priority but if you follow the ways how professional debt consultant do it, then their suggestion help you a lot in many ways like;

  1. Start paying off similar kind of debts of smaller in amount and interest rates, it will reduce your burden having various credit and you know these kinds of debts are easier to pay.  After paying off one debt individual can get more satisfaction and courage to start concentrating on the next debt amount to be paid.
  2. Paying off one big value debt having higher interest rate like credit card repayment require your most urgent attention, as you know interest occurring from the credit card is very high and payday loan late payments can charge you with penalty and high fee, don’t delay in paying off these expensive debts. This strategy will definitely enhance your satisfaction, creditability and more handy cash that let you concentrate on the other debts to reduce.

As an individual you have variety of options but choosing one best may determine by your own convenience that’s why go with the option that satisfy you a lot. If you are facing poor credit rating, you will observe when you start paying off debts to your lender, your credit rating will improve having lesser debts. It will also help you in getting your desired low rates big loans for your various types of future investments.

If you’re struggling with your credit card debts and other high interest rates debts and want to adopt better ways to manage your finances then credit counselling could be a right solution for you. You are also advised to consult with your debt consultant; there is variety of debt relief Canada websites available online today where you can get free debt help and analysis, and if it satisfy you, you may ask them their full help.

Lowering down your high debt-to-income ratio is not an easy task, but you still have a great option to lower it accordingly because its not in hands of other than you, take responsibility of your personal finances, educate your self, control your spending habits while purchasing smartly only things you need most, stop your frequent credit cards usage. You will be surprised yourself to find out about how changing your habits will improve your money management skills and help you reduce your debt.


Annual State Of The Residential Mortgage Market In Canada 2011 Brief Introduction

7th Annual State of the Residential Mortgage Market in Canada (ACCHA) November 2011 Prepared for Canadian Association of Accredited Mortgage Professionals (CAAMP) By Will Dunning CAAMP Chief EconomistThe Canadian Association of Accredited Mortgage Professionals released their “Annual State of the Residential Mortgage Market in Canada – November 2011”. According to the report the average mortgage growth is expected to be 7.3 per cent in 2012, beside, it is increasingly expected about mortgage interest rates that will remain low for a prolonged period, so Canadian consumer can get best mortgage rates in coming future. Here is the brief overlook of this report.

Introduction and Summary

This is the seventh annual report on the State of the Residential Mortgage Market in Canada. It has been prepared for the Canadian Association of Accredited Mortgage Professionals (“CAAMP”) by Will Dunning, Chief Economist of CAAMP. It provides an overview of the evolving state of the residential mortgage market in Canada. Major sections of this report are:

  • Introduction and Summary
  • Consumer Responses to Topical Questions
  • Consumer Choices and Satisfaction
  • Outlook for Residential Mortgage Lending

Data used in this report was obtained from various sources, including an online survey of 2,000 Canadians. More than one-half of the sample (1,031 Canadians) were home owners who have mortgages and/or other debt on their property. The remainder included renters, home owners without debts on their properties, or others who live with their families and are not responsible for mortgage payments or rents. The survey was conducted for CAAMP by Maritz (a national public opinion and market research firm) from October 20 to 25, 2011.

Consumer Responses to Topical Questions

In the Fall 2010 and 2011 editions of the CAAMP survey, consumers’ opinions were sought on several issues, related to housing and mortgages, that have taken on high profiles in the media. The consumers were asked to what extent they agree with various statements, on a 10-point scale: a response of 10 indicates that they agree completely with the statement and a response of 1 indicates they disagree completely. Average scores of 5.5 would indicate neutral opinions.

The table below summarizes the responses. Results are presented in substantially more detail in the body of the report (starting at Page 9).

For all of the questions, responses varied widely, and it is challenging to generalize about consumers’ attitudes. Highlights include:

  • The statement that found the highest degree of agreement (an average rating of 7.98 out of 10) is that “as a whole, Canadians have too much debt”. Almost one-half (46%) gave ratings of 9 or 10, showing very strong agreement with this statement. This, coincidentally or not, has been asserted repeatedly by senior government officials and other voices in the news media.
  • There is also agreement (average rating of 7.11 out of 10) that “low interest rates have meant that a lot of Canadians became homeowners over the past few years who should probably not be homeowners”.
  • However, different perspectives were found with several other questions.
  • There is a widespread opinion that “real estate in Canada is a good long-term investment”, which received the second highest rating, an average of 7.27 out of 10.
  • Furthermore, there was a high degree of agreement that mortgage debt is “good debt (7.07 out of 10).
  • In addition, in a statement that was asked for mortgage holders only, few agreed that “I regret taking on the size of mortgage I did”. The average score of 4.04 was well below neutral. Just 7% agreed strongly with the statement; 37% strongly disagreed.
  • Many Canadians believe that other people have taken on too much debt or have bought homes for which they are unprepared. But, when responses about their own situations are aggregated, most believe that they have been responsible. The contrast between these sets of responses is interesting. Actual behavior by people and their beliefs about their own behavior tells us more than does their beliefs about the behavior of other people: overall these responses suggest that prudence rules the land.
  • Meanwhile, data on mortgage arrears indicates that there are very few Canadians who are not meeting their mortgage obligations, and estimates developed in this report indicate that a vast majority of Canadian mortgage borrowers are well positioned to deal with potential increases of mortgage rates. Moreover, they are acting aggressively to pay off their mortgages, considerably more rapidly than they are required to.

Consumer Responses to Topical Questions
Average Responses (10 = Completely Agree)

Topic Fall 2011
Canada’s housing market is in a “bubble” 6.07
I am concerned about a downturn in Canada’s housing market in the next year 5.84
Canada’s superior banking system will shelter us from significant downturns like the one experienced by the United States 6.11
As a whole, Canadians have too much debt 7.98
House prices in my community are at a reasonable level 5.62
Low interest rates have meant that a lot of Canadians became home owners over the past few years who should probably not be home owners 7.01
I/My family would be well-positioned to weather a potential downturn in home prices 6.72
Real estate in Canada is a good long-term investment 7.27
I am optimistic about the economy in the coming 12 months 6.02
I regret taking on the size of mortgage I did 4.04
I am delaying my retirement until my mortgage is paid off 5.38
I would classify mortgages as “good debt” 7.07

Source: Maritz survey for CAAMP, Fall 2011.

Consumer Choices and Satisfaction

The survey found that Canadians remain highly satisfied with the terms of their mortgages, and their experiences in obtaining their mortgages:

  • 13% indicate they are completely satisfied with the terms of their mortgages (giving a rating of 10 out of 10) and a further 58% are satisfied (ratings of 7 to 9 out of 10). Combining these results, 71% are satisfied to some degree.
  • 21% give a neutral satisfaction rate (5 or 6 out of 10).
  • Just 8% are dissatisfied to some degree (1 to 4 out of 10).
  • On average, the satisfaction rate is 7.4 out of 10.

Satisfaction with mortgage experiences was very similar, and the average rating was fractionally higher, at 7.6 out of 10. Older age groups are more satisfied with their mortgages and their mortgage experiences than are younger age groups. There are some variations across different groups.

About one-third (32%) of home owners with mortgages had some form of mortgaging activity during the past 12 months: taking out a new mortgage (9%), or renewing or refinancing an existing mortgage (23%). The remainder (68%) did not have any mortgaging activity during the year.

Among those who renewed or refinanced an existing mortgage during the past 12 months, 21% changed lenders and 79% remained with the same lender. The rate of switching has edged upwards – two years ago it was 12%.

Concerning types of mortgages, fixed rate mortgages remain most popular (60%). A significant minority (31%) are variable and adjustable rate mortgages. For mortgages originated or renewed during the past year, an increased share (37%) has variable or adjustable rates. This shift may be due to the large spread between rates for fixed rate and variable rate mortgages (close to 2% during the past year). As well, it is increasingly expected that mortgage interest rates will remain low for a prolonged period. Both of these factors are encouraging borrowers to accept the risk that the payments will increase for variable rate mortgages.

With regard to mortgage amortization periods, 22% of mortgages in Canada have amortization periods of more than 25 years. The share is higher (38%) among home owners who, during 2011, took out a new mortgage on a newly-purchased home or condominium.

Looking at interest rates, the CAAMP/Maritz data indicates that:

  • The average mortgage interest rate for home owners’ mortgages is 3.92%, a drop from 4.22% a year earlier.
  • For borrowers who have renewed or refinanced a mortgage during the past year, their current average interest rate is lower (by 1.24 percentage points) than the rates prior to renewal. Among borrowers who renewed, a large majority (78%) saw reductions, a smaller proportion (13%) saw their rates rise, and 9% had no change. Based on the survey data, it is estimated that among 1.35 million mortgage borrowers who renewed or refinanced in the past year, the combined saving was $2.7 billion per year.

Mortgage rate discounting remains widespread in Canada. During the past year, the average “posted” rate for 5-year fixed rate mortgages was 5.38%. Discounted rates are estimated at an average of 3.92%, implying an average discount of 1.46 points.

Given concerns that have been expressed about consumers’ abilities to cope with potential rises in interest rates, this issue of CAAMP’s “Annual State of the Residential Mortgage Market” asked mortgage holders to indicate “the amount at which, if your monthly mortgage payment increased this much, you would be concerned with your ability to make your payments”. The average amount of room is $750 per month on top of their current costs. A vast majority of mortgage holders has considerable capacity to afford rises in mortgage interest rates. There is a sizable minority (12%, or about 650,000 out of 5.80 million) who would be challenged by rate rises of less than 1%. However, most of these have fixed rate mortgages: by the time their mortgages are due for renewal, their financial capacity will have increased and the amount of mortgage debt will be reduced. Moreover, most of these borrowers (88%) have 10% (or more equity) in their homes. There are about 75,000 borrowers who are susceptible to short term moves of interest rates and have limited home equity – less than 2% of the 5.8 million mortgage holders in Canada.

This study asked questions that generated estimates of home owners’ equity.

  • The total value of owner-occupied housing in Canada is estimated at $3.017 trillion. Mortgages and lines of credit on these homes total $982 billion, leaving $2.035 trillion in home owners’ equity. The equity is equal to 68% of the total value of the housing.
  • Among home owners who have mortgages and/or lines of credit on their homes, 2% might have negative equity, and a further 4% have estimated equity of less than 10%. More than three-quarters (78%) have 25% or more equity.

The survey data indicates that 10% of mortgage borrowers took equity out of their home in the past year. The average amount is estimated at $49,000. These results imply that the total amount of equity take-out during the past year has been $28.5 billion. The most common use for the funds from equity take-out is debt consolidation and repayment, which accounted for $11 billion. This part of the total equity take-out would result in corresponding reductions for other forms of consumer debt. Home renovations accounted for about $5 billion of the equity take-out, with $6 billion for education and other spending, $3.5 billion for investments, and $3 billion for “other” purposes.

Among borrowers who have taken out a new mortgage during the past year, 52% obtained the mortgage from a bank, 32% from a mortgage broker, and 16% from other sources.

Outlook for Residential Mortgage Lending

Gradual recovery from the recession of 2008/09 has brought stabilization of housing activity, but at lower levels than pre-recession. The consensus of forecasts is for a continued moderate rate of job creation, which is expected to result in housing activity similar to recent levels, for both resales and new homes. These levels of activity are strong enough to support stable or slowly rising housing values: the average of forecasts is for house price growth of about 1% in 2012, a slowdown from the very strong growth of 7.7% expected for 2011.

As of this August, there is $1.079 trillion of residential mortgage credit outstanding in Canada. This includes both owner-occupied and investor-owned residential properties.

Based on the housing market forecasts, the volume of residential mortgage credit outstanding is forecast to continue expanding. Growth is forecast at about 7.7% during 2011 ($80 billion) and 7.3% in 2012 ($81 billion). A preliminary look at 2013 suggests growth of 7.0% ($83 billion).

While the forecasts for the economy, housing market, and mortgage market are encouraging, there is, as always, uncertainty about the outlook. In Canada, the largest risk factor for the mortgage market is “loss of ability to pay” (that is, job loss or a reduction of wages).

Data published by the Canadian Bankers Association shows that the gradual recovery from the recession is resulting in a gradually falling rate of mortgage arrears.

An increasing level of uncertainty about economic prospects is creating uncertainty about the outlook for the housing and mortgage markets.

The risk factor that gets the greatest amount of attention in Canada might be characterized as “an unaffordable rise in mortgage costs”. CAAMP’s research has repeatedly found that this is a negligible risk factor for Canada at present.

Thus, there are risks of outcomes worse than these forecasts. If that occurs, the cause will have been events in the broader economy. The US’s enormous economic difficulties started in the housing and mortgage markets. That will not be the case in Canada.

Looking for the full report, click here to download it from its official location (Canadian Association of Accredited Mortgage Professionals), its 34 pages PDF ebook that requires an Adobe Acrobat Reader to open the report. Source: Annual State of the Residential Mortgage Market in Canada, Nov 2011, CAAMP.

Disclaimer! This report has been compiled using data and sources that are believed to be reliable. CAAMP, Maritz, Will Dunning, and Will Dunning Inc. accept no responsibility for any data or conclusions contained herein. The opinions and conclusions in this report are those of the author and do not necessarily reflect those of CAAMP or Maritz.

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