Beware of Mortgages That Are Too Big
Who remembers the “Subprime” crisis or the real estate crisis of the early 1990s or even more recently the dizzying fall of Bitcoins? Few people are immune to the drastic fall of the markets. In this article, we’ll warn you against oversized mortgages. Several real estate investors have built real estate portfolios exposing them to a lot of debt.
Mortgages as an Economic Lever
Certainly, mortgages are an important lever in our modern economy. However, over-indebtedness can be dangerous. The canadian household debt ratio is at a record high, according to a December 14, 2017 article in the Journal de Montréal: “For every dollar available, the average household debt increased by one cent, from $1.70 in the second quarter to $1.71 in the next.” … “This growth was mainly due to mortgage debt, which grew 1.5% in the third quarter compared to the previous quarter to $1384.2 billion. »
The new mortgage rules now allow a buyer of a property to be required more down payment. This is a good thing because buyers are stronger and less indebted.
From 1636 to 1637, there was a disproportionate increase in the unit price of tulip bulbs. At the top of the tulipomania, in February 1637, prices for a bulb were negotiated for an amount equivalent to ten times the annual salary of a citizen.
More recently, there has been the housing bubble in the United States. Markets like Miami have collapsed as a result of lower property prices. Real estate brokers had many condos in their possession that they wanted to sell at high prices. However, the story ended badly when the market became too speculative and prices collapsed. Mortgage lenders then took over thousands of properties.
This cryptocurrency misunderstood by many and scary for others. In itself, the Blockchain technology used by Bitcoin is a good thing and it is here to stay. However, Bitcoin is a virtual currency that has attracted speculators. They do not invest in technology, nor use their Bitcoins to buy goods or services. They buy Bitcoins for the simple purpose of speculating on the rise of the encrypted currency. From December 2017 to February 2018, Bitcoin fluctuates enormously and to the point of losing half its value…
Solutions to Debt
There are many solutions to debt. First of all, to not have too big mortgages it is suggested to put at least 20% down payment. Also, you have to pay your consumer debts, like credit cards, in the first place. It even bothers to borrow at 5% to pay credit balances that are at 20% or more. Another solution to debt is to always know how much you owe. Software like Mint or even a simple sheet of paper where you can see at a glance how much you have, you owe and how much you do monthly.
Cet article de fonds sur les prêts hypothécaires trop gros nous a permis d’analyser l’aspect du levier économique des prêts hypothécaires et l’historique des hypothèques et des bulles financières. Finalement, l’article nous donne de nombreuses pistes de solutions face à l’endettement. J’espère que cet article vous a plu. Si c’est le cas, partagez-le sur les réseaux sociaux.