Only 12% of millennials confident enough to make mortgage decisions

If your millennial client is buying her first home, she may have mortgage concerns that need to be addressed.

That’s because only 12% of Ontario millennials likely to get a mortgage say they feel very confident they know everything they need to know to make the best decisions, reveals a survey by the Financial Services Commission of Ontario (FSCO). And 47% say they aren’t very or at all confident.

Other survey findings:

• Only 22% of millennials likely to get a mortgage know they need a 5% down payment to buy a home in Ontario.
• When asked about closing costs, only 39% named legal fees, 24% named land-transfer tax and 8% named insurance; 25% didn’t know what closing costs are.

Meanwhile, of millennials who already have a mortgage, many are not prepared to deal with unexpected events or costs:

• Just 42% say they have six months of emergency savings in case something unexpected happens, such as losing a job.

Read: Not all mortgage rate hikes are created equal

• Just more than a third (37%) say they understand very well what happens if they miss a mortgage payment.
• Fewer than half (43%) have a life, disability or critical illness insurance policy on the mortgage.

Read: Sudden rise in rates could drop home prices by 30%: CMHC

For client information on mortgages, visit FSCO’s website.

Also read: GTA builders providing smaller, more affordable homes

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.