THE WAY HOME

Dream of owning a home comes true for more single women

‘Young women in their 30s make the best mortgage candidates out there in the Canadian housing market,’ says Lesley-Anne Scorgie, the Toronto-based author of three books, Well-Heeled: The Smart Girl’s Guide to Getting Rich, Rich by Thirty: Your Guide to Financial Success and Modern Couple’s Money Guide.

Women are better than men at paying off their mortgages, according to a Canadian financial expert whose study of individual credit scores concludes that females are more financially responsible than males when it comes to home ownership.

“Young women in their 30s make the best mortgage candidates out there in the Canadian housing market,” says Lesley-Anne Scorgie, the Toronto-based author of three books, Well-Heeled: The Smart Girl’s Guide to Getting Rich, Rich by Thirty: Your Guide to Financial Success and Modern Couple’s Money Guide.

“Single women have a lower tendency to default than males. It has to do with their psychological make-up. It has to do with risk aversion which women have more of than men,” adds Ms. Scorgie, owner and operator of MeVest, a money school for Canadians offering one-on-one money coaching.

Female power of the financial kind is helping to drive the real estate market across North America, experts say.

Single females now make up 15 per cent of all home buyers, according to the 2016 U.S. National Association of Realtors Home Buyer and Seller Generational Trends report.

That number increases when the focus is on older single female buyers of whom 20 per cent are between 51 and 60 years of age and 19 per cent between the ages of 61 and 69.

Pierre Leduc, spokesman for the Canadian Real Estate Association in Ottawa, says that Canada has no equivalent data. But there’s plenty of anecdotal evidence to suggest that Canada likewise has seen a spike in the number of single females buying property over the past year.

“I have worked with many single women, as have many of my colleagues, who are ready, willing and able to purchase on their own,” says Toronto real estate agent Suzanne Manvell.

“Some like the convenience of a condo, others a simple residential home. Some, including myself, have elected to become landlords and are happy in that role and have parlayed their first purchase into a secondary income property.

“So yes, the dream of owning your own home is alive and well in singledom.”

The trend holds strong even among women whose earnings fall below those of men.

‘Even a .5-per-cent difference in interest rates makes an incredible difference over the lifetime of a mortgage, resulting in women paying thousands of dollars more than men for the same product,’ says Vicki Battah, a financial adviser and managing partner with Horizon Partners Ltd., in Sudbury, Ont.

What matters to lenders is “the creditworthiness of the applicant,” says Vicki Battah, a financial adviser and managing partner with Horizon Partners Ltd., in Sudbury, Ont.

“Banks will look at an individual’s credit worthiness to determine the kind of mortgage products available to a potential client,” adds Jeffrey Schwartz, the executive director of Consolidated Credit Counseling Services of Canada.

“If a consumer comes into a bank and they have a strong credit profile, regardless of their age, background or gender, their credit profile will be a leading indicator to determine the mortgage terms they’re able to acquire.”

Banks are prohibited by law from discriminating against potential borrowers on the basis of gender. But a recent U.S. study finds that women generally pay more for mortgages despite being less likely to default on their loan payments.

Single women “have much lower incomes and much higher loan size divided by income,” says the Urban Institute, a Washington, D.C. think-tank engaged in economic and social policy research.

While Canada does not have comparable data, industry analysts say that women in this country would also pay more for mortgages but only if they pose a credit risk.

“Statistics show that in Canada women do make less than males on average,” says Chantel Chapman, a financial fitness coach in Vancouver, affiliated with online financial firm Mogo. “That wouldn’t normally impact their rate, but it would impact the amount that a single woman would be qualified to borrow.”

For every dollar earned by a man, a woman earns 72 cents, according to the latest data compiled by Statistics Canada. The gap widens with part-time women workers, who earn an average of 66.7 cents for every dollar earned by men.

‘Statistics show that in Canada women do make less than males on average,’ says Chantel Chapman, a financial fitness coach in Vancouver, affiliated with online financial firm Mogo. ‘That wouldn’t normally impact their rate, but it would impact the amount that a single woman would be qualified to borrow.’

“If women today are still making less than men for the same work, and all other factors being equal, women’s debt-servicing ratios would be higher, which would largely impact their ability to receive comparable rates,” observes Ms. Battah.

“Even a .5-per-cent difference in interest rates makes an incredible difference over the lifetime of a mortgage, resulting in women paying thousands of dollars more than men for the same product.”

But Arpad Komjathy of Verico Dynamic Mortgages in Toronto contends that women in Canada who pay more for their mortgages is an uncommon scenario.

“After being a mortgage broker for over 13 years and arranging over $150-million in mortgages, I have not come across a case where a person would pay a higher mortgage rate due to her gender, nor have I heard from a borrower or industry participant ever mentioning this to be the case,” Mr. Komjathy says.

Ms. Scorgie would agree.

“I have bought many homes myself,” she says. “And I have never experienced that. I have never paid more than a man for a mortgage.”

Securing a mortgage in three easy steps

1. Know your credit score – Lenders are looking for a credit score with at least a 620 rating for a favourable interest rate. If you are thinking of shopping for a home, do your homework first. Give yourself a year. That way if your score needs a boost, there will be opportunity to improve it by the time you start seeking a mortgage.

2. Make sure you have credit – Having no credit is not going to help you or your rating. In fact, it will hurt you. Credit scores are lower when balances are close to their limits. Always make sure to pay down your credit cards to at least 80 per cent of their limit.

3. Do your homework – Shop around for rates. The biggest mistake you can make is going with the first institution willing to offer you a mortgage. Banks are competitive and they want your business. You are almost guaranteed to get a better rate than the first one you are offered, if you ask around.

Par Carlos Arriola