Rising house prices: the plague of the resort town—and how to come out on top

This story first appeared in print in the Winter 2020 issue of Revelstoke Mountaineer Magazine. Read the e-edition here:

https://issuu.com/revelstokemountaineer/docs/rmm_2020-winter_web-pdf

By Laura Wierzbicki, Consultant at IG Wealth Management (Investors Group Financial Services Inc.)

Laura Wierzbicki, Consultant at IG Wealth Management

My name is Laura Wierzbicki, Consultant at IG Wealth Management (Investors Group Financial Services Inc.). This is my first of many finance columns. I hope to make comprehensive financial advice easy and accessible with a few hundred words each month.

Here it goes: for those hoping to get into the housing market, it’s not too late! As someone whose job it is to advise people on making healthy financial choices, I literally have a library of tips and knowledge up my sleeve. The right home will present itself, but you’ll have to do the groundwork—and note that the real estate market doesn’t take weekends off. Check the listings online (realtor.ca) and diligently drive through your favourite neighbourhoods to scope out any new “For sale” signs.

Naturally, that’s not all it takes. The truth is, you’re not just signing up for a down payment and a mortgage; you’re signing up for many years of unexpected repairs, upgrades, and monthly household costs. So it’s best to get your saving game into motion. Put aside more than what you need for a down payment.

In BC, you’re required to pay a minimum of 5% on houses below $500,000. If the house is priced between $500,000 and $999,999, your minimum down payment will be 5% of the first $500,000 and 10% of any amount over that first sum. Your down payment will vary based on your credit score, assets, and employment situation—and it’s good to know that anything below 20% requires you to pay Canada Mortgage and Housing Corporation (CMHC) insurance.

First time buyers have a lot of people rooting for them. For example, you can save your funds in your RRSP to take full advantage of the First Time Home Buyers’ Program, in which you can withdraw $35,000 (tax free!) from your RRSP to pay for your down payment, then repay the sum over the next 15 years. The program is also available for individuals who’ve recently been through a divorce or separation.

Luckily, interest rates on homes are at an all-time low because of our current economy. Get inspired to save up by picturing the little interest you’ll have to pay on your mortgage. It won’t be much more than rent. While you save, it’s good to know what state your credit score’s in. If you’ve missed or been late on payments in the past, your credit score may be dragging you down. Find out the current state of your credit score. If it’s in rough shape, focus on building it back up while you save. Finally, and this’ll help with the previous credit score quandary, prioritize paying off your debt with high interest rates.

With more knowledge, the road to homeownership isn’t daunting. My suggestion: start by getting these tips in motion and I’ll be here waiting to give you guidance every step of the way.

Already own a home?

My advice isn’t just for new buyers. Existing homeowners have great potential to use their home equity to fund their retirement, or to repay any outstanding debt. This market leaves so much room for the imagination when trying to capitalize on existing assets. Better yet, this existing low interest rate environment brings even more appeal to capitalizing on your cash flow and reviewing your debt management needs.

Likewise, second home owners can make a great income from their investment (think vacation rental or Airbnb!), but keep in mind the taxes that come with it—and feel free to reach out for suggestions on mitigating that mountain of taxes. After all, there are tons of expenses you can write off. This is just the start of our talk on homeownership.

Laura’s advice comes with 10 years’ experience in financial services. She offers comprehensive, fully customizable financial strategies and solutions, working one-on-one with business owners, retirees, families, and individuals focused on building their net worth. Don’t hesitate to reach out for a holistic approach to investment solutions, insurance products, and mortgages.

Laura Wierzbicki BBA
Investment Consultant
Email: [email protected]
Phone: 250-878-4174

Investment Planning | Retirement Planning | Tax & Estate Planning | Insurance | Mortgage Planning

Trademarks, including IG Wealth Management and IG Private Wealth Management, are owned by IGM Financial Inc. and licensed to subsidiary corporations. Investors Group Trust Co. Ltd. is a federally regulated trust company and the mortgagee. Mortgages are offered through I.G. Investment Management, Ltd. Inquiries will be referred to a Mortgage Planning (Agent) Specialist.