Mortgage Delinquency Rates Canada

Mortgage Delinquency Rates Canada

 

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Introduction

The inability to make timely payments on a mortgage, often known as mortgage delinquency, can have significant repercussions for homeowners and the housing market. Inflation is a primary cause of criminal behavior, even if other factors may also play a role. In this piece, we will investigate the correlation between growing prices and borrowers falling behind on their mortgage payments, investigate the impact that higher prices have on borrowers, and consider some possible solutions to the problem.

Understanding Mortgage Delinquency

Mortgage delinquency occurs when homeowners fall behind on their monthly mortgage payments, often due to financial hardships such as job loss, medical emergencies, or unexpected expenses. Delinquency can lead to foreclosure, resulting in the loss of a home and severely damaging the borrower’s credit history.

 

To begin, let’s discuss delinquencies, which are often misinterpreted. The country’s mortgage delinquency rate is the percentage of total mortgages in Canada overdue by at least 90 days. After ninety days, the lender has the right to act if the borrower does not pursue a remedy, such as reinstating (past due) or redeeming (paying it off in full). This is the moment at which a lender can take action. Most people believe that a low rate indicates that consumers are in good health, but the truth is that it indicates that the market is liquid. 

 

If a borrower is aware that they cannot catch up on payments, they will likely sell the property. When there are a lot of buyers on the market, the process moves quickly, and the house can be sold before the lender does anything. The time it takes to sell a property in a slow market raises the risk of the owner defaulting on their mortgage before the property can be sold. 

 

Bubbles are more likely to be reflected in low delinquency rates than robust consumer health. In a bull market, if you cannot pay your bills, you may have a profit; nevertheless, forced sales do not show up as a stat because no one defaulted on their payments. 

Inflation’s Impact on Mortgage Delinquency

Inflation is the sustained increase in the general price level of goods and services over time. As inflation rises, the purchasing power of money decreases, making it more expensive for consumers to maintain their standard of living. Several ways inflation affects mortgage delinquency are as follows:

Increased Cost of Living

Inflation drives up the cost of living, affecting essential expenses such as food, transportation, and utilities. As household expenses rise, homeowners may need help to allocate sufficient funds to cover their mortgage payments.

Stagnant Wages

While inflation drives up prices, it does not always result in a proportional wage increase. If wages keep pace with inflation, homeowners may experience decreased disposable income, making it easier to manage their mortgage payments.

Interest Rate Hikes

The central bank may raise interest rates to control consumer spending and borrowing in response to inflationary pressures. Higher interest rates translate into more expensive mortgages, especially for borrowers with adjustable-rate mortgages (ARMs). This increased cost of borrowing can lead to financial strain, increasing the risk of delinquency.

Home Equity Erosion

Inflation can impact the housing market by causing home values to appreciate. While this may seem beneficial, it can lead to higher property taxes and insurance costs. Additionally, homeowners who purchased during periods of high inflation may experience limited growth in home equity, reducing their ability to tap into home equity for financial emergencies.

Mitigating the Impact of Inflation on Mortgage Delinquency

While inflation’s impact on mortgage delinquency can be challenging, there are several strategies homeowners can employ to mitigate its effects:

Budgeting and Financial Planning

Creating a comprehensive budget and financial plan can help homeowners allocate resources effectively, ensuring they have sufficient funds to cover mortgage payments despite rising living costs.

Refinancing

Homeowners with adjustable-rate mortgages may consider refinancing into fixed-rate mortgages to lock in lower interest rates, protecting them from potential rate hikes in the future.

Emergency Fund

Building an emergency fund can provide a safety net for unexpected expenses, reducing the risk of falling behind on mortgage payments during financial hardship.

Early Communication with Lenders

Early communication with lenders can be beneficial if homeowners anticipate difficulty making mortgage payments due to inflationary pressures. Some lenders may offer loan modification options or temporary forbearance to assist borrowers facing financial challenges.

Inflation-Indexed Mortgages

In certain cases, inflation-indexed mortgages may be available, where interest rates adjust based on inflation rates. These mortgages can provide borrowers with more stability during periods of rising prices.

Invest in Hard Assets

Hard assets like gold, silver, and precious metals are a great store of value. They are rare and have standards of measure that help them hold trier value over time, something that can not be said about paper money. 

Conclusion

Inflation can significantly impact mortgage delinquency by increasing the cost of living, affecting wages, and leading to interest rate hikes. Homeowners facing inflationary pressures must proactively manage their finances and find ways to protect themselves from potential mortgage delinquency.

 

Understanding the connection between inflation and mortgage delinquency empowers borrowers to make informed financial decisions, develop sound strategies to weather economic challenges, and protect their homes and financial stability. By employing prudent financial planning, considering refinancing options, and early communication with lenders, homeowners can increase their resilience to inflation’s effects and secure a brighter financial future.

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So you have decided to buy silver online.

Great choice. Let’s talk about silver.

Silver is exceptionally popular today. Part of the reason for this is the belief that it’s potential for upside value increase is even greater than the same belief in gold. In fact, there is a very good book on this subject entitled: “ Why Silver Will Outperform Gold by 400% in the coming years”. It’s a very scholarly book and quite convincing. Give it a read if you have the time.

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Mind you, one need not look as far as that book to find evidence of the common belief that silver has great potential for growth in the near future. All one has to do is go to the web or even Youtube and there are advocates of this thought at every turn.

At Durham Precious Metals we believe that silver is an easy choice because it gives a sense of substance due to its lower cost per ounce than gold.

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Probably 90% of our business is silver sales so this sentiment is fairly unanimous throughout the public. 10oz bars seem to be the most popular. Generic rounds and Silver Maples seem to be the next most popular and 1oz bars a close 4th place. It is our opinion that 10 oz bars and 1oz rounds are your best value as their premium over spot is very reasonable. However, there is no wrong choice when it comes to our silver product line because we try to concentrate on product lines with low premiums anyway.

Silver has always been a form of money. There are those that will argue that silver has been demonetized but we beg to differ. All one has to do is refer to the (CCRA) definition for 999 bullion. It is deemed by Rev Can to be a “ financial instrument”. Enough said on that subject!

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From a utility standpoint, silver has somewhere in the neighbourhood of 60,000 industrial uses including painting the backs of mirrors to create the reflective surface to collecting radiation in solar panels. If nothing else, the lack of an above ground supply of silver ( which is relatively new historically) will keep the demand for this metal strong since for most applications there is no viable substitute.

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Can you imagine the mayhem that would ensue if all the major electronic manufacturers came grinding to a halt due to a silver shortage? It would be catastrophic to the economy. We believe that this fact alone will be a major driver of support for the silver price when the powers that be run out of tricks in their attempt to suppress the price of silver. And yes, we agree that this practice goes on in plain sight and that the regulators turn a blind eye. Let’s hope justice prevails and that the historic silver/gold ratio returns to its traditional level.

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In the meantime…keep stacking!

So you have decided to buy gold online.

Great choice! Let’s talk about gold then, shall we?

Gold is, and always has been, a favorite of collectors of precious metals. Its 6000-year history of sustaining wealth is unprecedented. The yellow metal has launched wars, bought fortunes and has been a form of money throughout that history. It is one of the densest metals and also one of the densest elements on the periodic table. It weighs in at a density of 19.32 grams per cubic centimeter. Water, by contrast, has a density of 1 gram per cubic centimeter.

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Platinum is the densest of the common 4 precious metals at 21.45 grams per cubic centimeter.

People will often ask when gold is the right choice to buy as opposed to other metals such as silver. This is a very common question. There is no easy answer that anyone can give to someone so we always boil it down to practical applications.

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Consider how much of an investment you are planning to make over-all throughout the course of your precious metals buying.  If you are planning on purchasing, for example, $10,000 worth of metals and then cap your spending then it really doesn’t matter which metals you buy. The volume of the purchase will be relatively small in terms of weight and size. Our main concern and Durham Precious Metals comes down to simple things like , cost of storage, cost of shipping and bulk. We are always trying to help our customers have the best experience as metals collectors.

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For example, if you were to tell us that you are considering selling a piece of real estate and use the proceeds to buy metals then gold would be our suggestion. The reason comes down to volume and weight at this point. Several hundred thousand dollars of silver would be an incredible amount of bulk at this spend level. Hundreds of pounds of silver would be hard to store practically and would be more expensive to store as well. If you are the DIY type it would also be harder to hide than a comparable dollar amount of gold.

Keep in mind that at the time of this writing gold is about 75 times more expensive in dollar terms as the same weight of silver. That equates to 75 times less bulk per dollar spend. This will make it much easier to hide or store if you are looking at large purchase amounts.

Price of Gold?

If you are only considering a small total purchase amount either of the metals is perfectly fine. The one consideration we always emphasize for small purchase amounts really comes down to personal perception. Here is what we mean. Silver is 75 times more bulky per dollar spend. Obviously, it is going to feel a lot more substantial if you buy $5000 worth of silver and have several hundred ounces to admire than only about 3 ounces. It’s a perception thing at this point but perception matters to people since perception can make us feel a particular way about what we spend our money on.

In closing, gold and silver are both great choices and neither is wrong in terms of their value of utility. They have both had a long history as a store of wealth and that isn’t likely to change any time soon.

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We often carry pieces that we don’t list on site so feel free to call us for an up-to-date list.

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When you consider silver value and gold value, the wise choice is to stock up today. At Durham Precious Metals we make it easy and convenient to buy silver and buy gold online.

For those who are serious about investing in gold and silver bullion, DPM is your one-stop store to buy gold and buy silver, whether it be through our website or our retail store.

Many people want to know where to buy gold and do not realize they can avoid the traffic hassle of driving into the city and visit us at DPM located in Oshawa, Ontario. See our Retail Store page for directions. Our customers are delighted with our competitive silver price. We carry mint direct silver bars, silver coins, gold bars and gold coins.

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