Monday, January 10, 2011

Men and Women are different

Kim Kargus was recently divorced and looking for a home to buy for herself and her daughter. The 36-year-old child protection worker loved the look of a three-bedroom house in Cobourg, but was a bit nervous about putting in an offer.

She had always rented and was concerned about taking on the debt, a mortgage and the day-to-day responsibilities, from plumbing to electrical, of home ownership.

“When you are renting and something goes wrong, you can call your landlord to come and fix it. But when you buy a house, it all falls on you,” she says. After doing some research, she knew she was ready to take the plunge.

“I had heard lots of other people’s stories, both good and bad. And so I was kind of anxiously waiting and hoping everything was going to go well,” she says.

Kargus’ situation is a good example of how men and women differ in attitudes towards buying a house. Studies by Genworth Financial Canada found more women than men want an easy to understand mortgage structure, and low monthly payments.

Women are also more anxious about their financial future, find shopping fora home more stressful then men, but like men find the notion of home ownership comforting.

A recent Bank of Montreal study made similar findings, noting that women are more likely to report feeling overwhelmed by the home buying process. This trend – and the fact that more women are buying their own homes – has led to a rise in services catering to women.

Banks are focusing on female buyers in their marketing materials and mortgage brokers, such as Marcy Berg, have sprung up. Berg runs the Cobourg-based Mortgages for Women, which courts female clients.

Berg’s clients include separated and divorced women as well as the never-married, single crowd. The latter group is on the rise. A 2007 Royal LePage survey found that 30 per cent of women who have never been married already own their own home. And of those who didn’t, 31 per cent said they planned to purchase a home within three years.

Kargus met Berg three years ago and was preapproved by a mortgage company for a mortgage but the interest rate was fairly high – partly because rates were generally higher at the time but also because Kargus had some debt.

Berg encouraged Kargus to postpone her purchase and pay off her debt to improve her credit rating. She also suggested Kargus wait at a year to buy to give housing prices and rates a chance to drop. “It was one of the best pieces of advice that I ever got,” Kargus says.

Two years later, when she returned to Berg, houses were more affordable. Thanks to paying off her debt and interests rates dropping, Kargus received a lower rate.

Looking back, Kargus says, it was worth the wait. “I don’t regret it all. I absolutely love my house.”

Some single women are purchasing a home with a friend or friends, says Laura Parsons, Bank of Montreal’s manager of specialized sales.

“We just put three waitresses into a mortgage last year,” said Parsons. “They work together. They were all paying rent at $1,200 a month. Why would they not go together? It’s an investment.”

Regardless of whether women who are buying real estate are single, separated, divorced, or coupled up, the home-buying process should begin the same way, Parsons and Berg say.

Sit down with a mortgage specialist or mortgage broker to find out what you can afford. Don’t get rushed through the process over the phone. “There is so much disappointment in that,” Parsons says.

With a mortgage, don’t just focus on the monthly payments. Pay attention to the amortization schedule, which shows, over the entire term of your loan, how much of each payment goes towards interest and how much goes towards principal. (The allocation will change over time.)

“You have to look at how much money this is going to cost you over the life of the mortgage,” Berg says. “People look at the monthly payment and say, ‘I can afford this.’ Well, you can afford the payment, but is it the smartest payment to make?”

After meeting with a mortgage specialist or mortgage broker, don’t be discouraged if the conclusion is that now isn’t the best time for you to buy. Get help setting up a plan that will lead you towards home ownership, Parsons and Berg say.

Naomi Carniol is a Toronto freelance writer.

David Pylyp; When you are ready, lets work out your financing details, and without any pressure or drama, find a place for you, your place to start building your own equity. Call or email.

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