Mortgage advice | Page 2 | Mortgages | Discussion forum

Bill said

One is you're giving them money, you've decided, so that's that.

My brother shared some sage advice with me years ago. In high school, he would buy a case of beer and go to a party. He knew that his friends would mooch off of him and drink his beer. If they ever returned the favour and bought him a drink in the future, he considered it a bonus. He never expected them to return any favours. He felt that if he didn't want to them to drink his beer, don't bring any, in the first place.

So, for all those who might regret what happens to their contribution/support/gift, treat it like a sunk cost. If the recipient does something for which you might not approve (like gambling the house away in exchange for magic beans), then don't give the money in the first place.

I noticed, as the housing price trends higher over the past decade, the birth rate in Canada goes lower. I call that correlation undeniable.

I don't believe it was a fertility issue but rather a financial one. Take Alexandra's case, if all a successful young couple can afford, without assistance, is a 1-bedroom condo, where are they going to house their future three, two or even just one child?

No matter how much people love to have children and raise a family, when they CAN'T OFFER living space for kids, they go with less or no kids .

Even worse, when people CAN'T OFFER living space for themselves, some become a "vander" (live in a van) or homeless. Have anyone seen tents setup along a highway rest stop or on public park space?

It is a tragedy that the government let this happen for years and years and did not do anything to take proper care of the human resource of the country. The fate of the nation is not going to bode too well status quo.

I encourage everyone to vote in the upcoming federal election (Apr 28), to vote for change, to vote for a more fiscally responsible government.

AltaRed said
Birth (fertility) rates have been going down around the world for decades, primarily due to better education for women in particular, more personal control over their own family planning, and a desire by families to improve their standard of living by mitigating excessive child rearing costs by having fewer children.

Increasing cost of living, particularly in developed countries, is a factor as well but that does not explain global downward trends in fertility rates. Many studies and analyses have been done in this phenomena.  

There has also been a significant increase in single individual dwellings - more people choosing to live alone ...

AltaRed said

That doesn't help buyers qualifying for a first mortgage in the first place which was what my gratuitous comment on 1% beneficial ownership was really about, not about securing one's gift with a second mortgage/lien.

Banks appear to be no longer happy with co-signers to a mortgage for qualification purposes. They want direct ownership so they can go after the benefactor in a mortgage impairment situation.

I see. That is a very different situation.

Lenders don't need the co-signer or guarantor to be a property co-owner to pursue the co-signer when the mortgage goes into arrears. That looks like a situation where the couple doesn't have enough income and fails to meet the debt service ratio maximums for a prime mortgage. The couple needs the co-signer to also be a co-owner and co-borrower so that the co-signer's income is added to the underwriting!

That would be a non-starter for me. Not going to take just a 1% ownership in return for "lending" 40% of the income needed to qualify for the mortgage on the property. As well, that kind of enabling of home ownership before achieving adequate income will set up a long-term dependency.

I look at global data, not cherry picked G7 data, or even G20 data, nor even overall OECD data to formulate my response regarding the downward trends in fertility rates. In every single region in almost (if not) every country in the world, fertility rates are down. One source https://data.worldbank.org/indicator/SP.DYN.TFRT.IN

Here is an even more visual effect with projected trends to 2049. https://www.statista.com/statistics/1034075/fertility-rate-world-continents-1950-2020/

Notice how developed regions are projected to be flat while Africa in particular, and Asia to a lesser extent are areas of most decline. You can do your own research with Pew Research as one source to drill down to individual countries, or even regions within a single country.

Wise adults choose not to have children at all, or to limit the number of children, so that each of those children can do better than what adults themselves experienced growing up. People all over the world raise children in tiny places and most of us, at least older, Boomer, adults grew up in more confined spaces, perhaps not more than 1200 sq ft at best, than did Gen-X and Millennial children in 1500-2500 sq ft. Perhaps the reference point used by Gen-Xers and Millennials today are the aberration rather than the norm.

This source https://www.darrinqualman.com/house-size/ does not show the latest trend back down in the most recent years but this source https://urbaneer.com/blog/two-bedroom-condos-are-in-demand-but-hard-to-find quotes 1700 sq ft. for an average new dwelling size in 2024. An average 2 bed, 2 bath condo appears to be in the 1000 sq ft size, perfectly fine for raising 1-2 children. I grew up in the 1950s and 1960s in a farm house less than 1000 sq ft in size with my parents and brother. We never felt any hardship doing so. There is no excuse not to do so today.

Bill said
Pioneers used to have a dozen kids in sod house, living space and poverty doesn't seem to have much to do with it.

On the other hand once women get/got control of reproduction (Pill) a growing number of them now find more fun things they'd rather do.  

Did you not mean to say…..On the other hand once MEN and women get/got control of reproduction.

As well, most of the men didn't get "stuck" with looking after the kids and sacrificing their career.

Loonie said

Well, it was the Conservatives, under Brian Mulroney, who pulled the plug on federal support for affordable housing. This policy was followed by Jean Chretien and every PM since then. This crisis has been over 30 years in the making.  

Parties shift all the time, over time. Always evaluate the current platform. And be careful of false promises... A party that suddenly adapts policies that are contrary to what they held just the previous election is likely just hawking for votes with insincerity, and will change spots once elected.

Loonie, you followed things earlier than I did for sure. I never heard of the phrase "affordable housing" until this government. Under Truduh administration, rapid rate hacking to 0.25% during the pandemic, at the same time massive money printing, that leads to real estate prices ballooning at rates that no wage increases can keep up. Since then, the word "unaffordability" became like the word of the year.

I don't know about previous governments, but for THIS government, when they talk about "affordable housing" solution, they mean the following:

Say a single family home (33'x100' lot) worth $1.8M. No one can afford. Right? Tear that down, Lib says, build a fourplex which would cost say $2.7M. Now, that's $675K per unit. The govt proudly claims that price becomes affordable on a now-available 30-year amortization. Basically, if you can't afford a pizza, let's turn the pizza into 4 mini pizzas.

Is that a happy ending story then? I don't think so. People starts living in dog crates bunching together in high density. Imagine yourself living in only 25% of all your current spaces available. Who would be happy?

Unaffordable housing that the current government pushes to build are a sham, not solutions.

Would other political parties do a better job than the current govt? No promises but hopefully. Trust me, there will be more and more homeless for status quo on housing policies.