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Canadians get creative to avoid renting

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Guest | 23 Jul 2012, 08:16 PM Agree 0

In fact, more than half of those borrowing to finance their vehicles are already opting for 72-month amortizations or longer, representing a nearly 40-percentage point jump from just five years ago, reads a report from JD Power and Associates.
“Consumers today just don’t think of the car as being $28,500,” said JD Ney, with JD Power. “They think of it as being $500 a month. There’s a certain pain threshold – whatever it takes, we’ll try and keep that monthly payment.”
Playing with amortization on car mortgages is one way mortgage brokers have advised clients looking to prepare for a mortgage application.
Still, most mortgage professionals have counselled borrowers to opt for less expensive auto purchases as a better of preparing to meet debt-service requirements and win home mortgage financing.
That advice may be increasingly hard to follow, with brokers pointing to mortgage rule changes that have only strained the ability of many borrowers to qualify.
That is a huge increase from just five years ago, when 14 per cent of buyers borrowed for six years or more, said J.D. Ney, an automotive account analyst in the consulting firm’s Canadian office.
  • Susan J | 28 Jul 2012, 03:59 AM Agree 0
    Possibly the government should have considered doing something about the amortization on car mortgages rather than on mortgages. By the time one pays off their car mortgage of 84 month (7 years) it is not worth much but down a mortgage for 7 years, you have built up equity and the property has increased in value. Again, I say the government should look at regulating other credit and leave mortgages alone
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