If you’ve got a mortgage renewing or plan to get a new one this year you probably know that it’s more complicated than it used to be. That said, I have some tips and strategies that can help you get the mortgage you need, tweak the one you have, or help you plan for renewal.

  • To get the best deal, you need options. When you go to your bank, you’re talking to one lender. Their best deal might not be THE BEST DEAL (last months article proved that). It’s also difficult to qualify at a bank if you’re self-employed, have past credit issues, or are finding the stress test a challenge. Credit unions, alternative, and private lenders are increasingly needed to help people get into new homes or refinance their current mortgage.
  • “What is your best rate”, has become a very difficult question to answer without first having all the information. Mortgage rule changes have thrown mortgage pricing up in the air. Your rate depends on a whole list of factors, which is why you can only get an accurate rate quote after an in-depth assessment of your personal situation. So be careful when checking out discount rate sites as they often over promise before they have the full picture.
  • The devil is in the details. People tend to focus on rate, but you can save thousands by making sure you get a mortgage that has fair penalty calculations, allows you to pay lump sums throughout the year, offers the ability to port or move your mortgage should you move, allows you to assign your mortgage to a potential buyer, and ensures you will also be treated fairly at renewal. The small print can cost/save you thousands and we help you understand the differences up front before you are facing an issue.
  • An insured mortgage might be a smart move even if you have more than 20% equity. If your mortgage is “uninsured” and you want to switch to a new lender for a better rate at renewal, that lender will qualify you using the “stress test”, which may affect your ability to move your mortgage, and giving your current lender no incentive to offer you the best rate available. It’s possible that you can switch your mortgage to a lower-rate insurable mortgage that has more flexibility.
  • Monitor and understand your credit score because the best rates go to borrowers with the best credit scores. Lenders are paying close attention to any warning signals that clients may have trouble paying their mortgage. If your credit slips and your lender feels your risk has increased, you may be offered a higher rate at renewal. We can help you better understand what drives your credit score and how to improve it.
  • A rental suite can be a sweet mortgage helper. A home with a rental suite could help you buy a single-family home instead of a condo, get you into that neighborhood you love, or help you offset mortgage payments in the house you’re in so you can become mortgage free sooner, but there are restrictions. Not all suites are eligible and we can help you to understand the differences.
  • Plug your biggest money leak. If debt is choking your cash flow and you have enough equity in your home, you may be able to move that debt to a lower-rate mortgage and save thousands. Using home equity to pay down debt is one of my specialties, but needs to accompanied by a plan to avoid the debt growing again!
  • Getting your mortgage pre-approved before you go shopping is more important today than ever. It helps you to target the homes you can afford and gives you the confidence and peace of mind to make a strong offer when you find the right property. Don’t assume you have a pre-approval unless the lender has reviewed your last 2 years income tax documents, current pay stub, and 3 months history of your down payment. If they didn’t require these things, you have a rate hold only, and you still don’t know if you qualify.

The New year is a new opportunity to make sure your mortgage strategy is working for you and helping you build wealth. If you want to discuss your personal situation and have me run your numbers, please let me know, as knowledge is power, and having the information will help you make better decisions?

Daryl French, AMP
LendingMax
250-470-8843

Read full post

As we begin another year, everyone wants to know: “Where is the housing market headed in 2019?”


The Canadian real estate market experienced a cooldown in 2018 following years of rapid growth. This left many homeowners and potential buyers feeling skittish. Fortunately, economists expect the market to stabilize in 2019 and continue to appreciate at a more sustainable rate. To help guide you through this shifting landscape, we’ve summarized some of the expert predictions and key factors expected to shape the housing market in 2019 and beyond.



SALES LEVELS WILL STABILIZE


A combination of rising interest rates, provincial policy changes, and a newly-implemented “stress test” requirement for mortgages pushed sales activity to a five-year low in 2018. However, economists expect the impact to taper off over time due to positive economic fundamentals: a strong economy, low unemployment, rising incomes, and rapid population growth.


“Far from a sign of trouble, we view this cooling constitutes as a healthy correction that would prevent overheating conditions from re-emerging in parts of Canada such as the Vancouver and Toronto areas. We expect a modest recovery to take shape in 2019,” noted the Royal Bank of Canada in its Canadian Housing Market Forecast. “We see little risk of a downward spiral because demand and supply conditions are balanced in the majority of local markets and expected to remain so over the forecast horizon.”1

 

What does it mean for you? If you’ve been scared off by reports of a market slowdown, it’s important to keep things in perspective. Policy changes were put in place to cool down an overheated market that had led to increased debt levels, decreased affordability, and historically-low inventory levels. A gradual and sustainable pace of growth is preferable for long-term economic stability.



PRICES WILL HOLD STEADY


Economists expect prices to hold steady this year, rising slightly to keep pace with inflation. While the national average price declined by 4.2 percent in 2018, the Canadian Real Estate Association predicts it will rebound slightly this year by 1.7 percent.


The Canada Mortgage and Housing Corporation also expects prices to remain high, but stable.  “By 2020, demand is expected to continue to shift towards relatively less expensive housing options such as apartment condominiums. This combined with slowing growth in economic conditions will lead to modest average price growth over the forecast horizon.”3


The Royal Bank of Canada agrees, cautioning that “would-be buyers hoping for a meaningful [price] break will likely be disappointed—we don’t expect aggregate prices to fall on an annual basis either this year or next.”1


What does it mean for you? If you’re a buyer waiting on the sidelines for prices to drop, you may want to reconsider. The current sales slowdown has made many sellers more willing to negotiate. Don’t miss out on the most favourable market we’ve seen for buyers in years.



NEW CONSTRUCTION WILL SLOW


The Canada Mortgage and Housing Corporation predicts new home construction will trend down over the next two years from a 10-year high in 2017. “Single-detached housing starts are anticipated to decrease over the forecast horizon. Construction of this housing type will continue to be limited by residential lot availability, but also by elevated price and borrowing costs in some major CMAs that represent an important portion of national starts.”3


However, economists expect the decline to be gradual. According to Fotios Raptis, a senior economist at TD Bank, “a steep downturn in homebuilding nationwide appears unlikely. Canada's population is on the rise, medium-term income growth should remain healthy, and most markets are generally not overbuilt.”4


What does it mean for you? Buyers will continue to have options in new construction. But the decreased rate of supply should help prop up the resale market, which is good news for sellers.



INTEREST RATE HIKES WILL TAKE A BREATHER … FOR NOW

 

After a prolonged series of interest rate hikes, the Bank of Canada announced in December that it will likely slow its pace of rate increases. “We no longer expect the Bank of Canada to hike its policy interest rate in January. Spring 2019 now appears to be the more likely timing, allowing for the bank to ensure that the growth narrative is back on track,” commented Brian DePratto, a senior economist with TD Bank.5

 

At the same time, the impact of the mortgage stress test has slowed the pace of new mortgages being issued by traditional lenders. So even as funding costs have risen, banks have been hesitant to raise the 5-year qualifying rate. In its latest Mortgage Rate Forecast, the British Columbia Real Estate Association predicts that the 5-year mortgage rate will hold steady this year—and may even decline in the first quarter.6

 

What does it mean for you? If you currently have a variable rate mortgage, the bank’s revised policy should offer some welcome relief. And if you thought rising interest rates would prevent you from buying a home this year, you may be pleasantly surprised.


 

WE’RE HERE TO GUIDE YOU


While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the local issues that are likely to drive home sales and values in your particular neighbourhood.

 

If you have specific questions or would like more information about where we see real estate headed in our market, let us know! We’re here to help you navigate this changing real estate landscape.


START PREPARING TODAY


If you plan to BUY this year:

 

  1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide an advantage over other buyers in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
  2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? We can set up a customized search that meets your criteria to help you find the perfect home for you.
  3. Come to our office. The buying process can be tricky. We’d love to guide you through it. We can help you find a home that fits your needs and budget, all at no cost to you. Give us a call 778-363-0839 to schedule an appointment today!

 

If you plan to SELL this year:

 

  1. Call us at 778-363-0839 for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list.
  2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. We can help you determine which ones are worth the time and expense to deliver maximum results.
  3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage ... and get you one step closer to moving when the time comes!



Sources:

  1. RBC Canadian Housing Market Forecast –
    http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housingforecastAugust2018.pdf
  2. CREA Resale Housing Market Forecast Update –
    https://www.crea.ca/news/crea-updates-resale-housing-market-forecast-4/
  3. Canada Mortgage and Housing Corporation Housing Market Outlook –
    https://www.cmhc-schl.gc.ca/en/data-and-research/publications-and-reports/housing-market-outlook-highlights
  4. TD Economics –
    https://economics.td.com/ca-housing-starts
  5. TD Economics –
    https://economics.td.com/ca-boc-interest-rate-announcement
  6. BCREA Mortgage –
    http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/mortgagerateforecast.pdfRate Forecast
Read full post
The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are member’s of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by CREA and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.