Buying a home is a huge decision. It is usually the biggest purchase of someone’s life so the more informed Canadians are, the better their ability to make good financial decisions. As REALTORS®, you conduct real estate transactions but you are also on the frontlines of financial literacy to help educate homebuyers. CREA’s Homebuyers’ Road Map is a great guide for clients who may be at the beginning of their home buying journey.
The Financial Consumer Agency of Canada (FCAC) has additional tools and resources to help your clients. Here is a snapshot:
FCAC has easy-to-understand educational material on mortgages that defines the key terms anyone planning to buy a home should understand. It explains in clear language how interest rates, payment frequency and the amortization period will affect monthly payments and the total cost of home ownership. It also outlines the many other costs consumers may have to pay, such as mortgage default insurance, land transfer taxes and moving costs. CREA has also created a series of short videos REALTORS® can use to help define these terms for their clients.
FCAC’s interactive mortgage calculator tool calculates the payments (principal and interest) for any given mortgage amount and the mortgage qualifier tool shows consumers how much financial institutions could possibly lend them, given their income and expenses.
Next, the interactive budget calculator helps consumers see the monthly mortgage payment they can afford. By showing them where their money goes and where they can trim their spending, this tool helps them save a larger down payment and make sure they can meet their regular mortgage payments.
Before shopping for a mortgage, it is important consumers order a copy of their credit report to make sure it does not contain any errors. Lenders will consider a client’s credit history before approving a mortgage. FCAC has educational web content on credit reports and scores that can help your clients. It explains how to get and understand a credit report—which summarizes a consumer’s bill payment history—and how to improve a credit score: a three-digit number that describes a consumer’s credit worthiness.
I appreciate the work CREA members are doing to make sure Canadians are well-informed as they embark on homeownership. You can find more information and resources to share with your clients on FCAC’s website at itpaystoknow.gc.ca.
November is Financial Literacy Month. Check out our promotional material and join the conversation online using #FLM2016 to spread the word and raise awareness about the importance of financial literacy.
