Blog › June 2012

Mortgage Rules Tighten in Canada

The Canadian Government has always been one of the more conservative ones in terms of their lending rules in an effort to decrease debt in Canadian households. 

In the current ever changing economy and the anxiety that is brought to lenders by the global economic atmosphere, today, new rules were announced for mortgage lending in Canada.

I thought it best to bring a great ARTICLE to your attention outlining all the changes to the mortgage rules in Canada.

Buying in a Stabilizing Market

This week I want to talk about buying in a stabilizing market. When the real estate market is booming and the prices are going up, it is obvious that buyers should make decisions fast before the price of their favorite property goes way up.

However, in a stabilizing market, where we see softer sales and listings that are coming out faster than they are selling; it is sometime hard for a buyer to make a decision because of the notion that there will be a lot of new listings coming out and the prices will go down.

In my personal experience and also with clients, it is always a great time to buy when you are ready to buy. And in a stabilizing market, where there are listings that are not selling as fast, a great real estate agent will be able to get you a great deal. 

Additionally, in most stabilizing markets, the buyer is usually able to take advantage of the best mortgage rates available and saving as much as $30,000 in a 5 year period in interest payments. That's a lot of money!

So if you are ready to buy, a stabilizing market will be a great time to buy because you will be able to secure a great deal and have a large amount of mortgage payment savings.

Feel free to contact me if you have any questions. 

Getting Pre-Qualified? Why?

Buyers, especially first time home buyers, often assume that the first step in the buying process is to go online, on a website like MLS or an agent's website, and start looking for the property whose pictures look good and sending that listing to their agent to make an appointment to go view it.

Contrary to this belief, my experience shows that buyers who start out this way, take about 40% longer to find something suitable and more often than not, they're either buying something they are not 100% happy with, or that the new purchase is stretching their budget.

Usually the most important step and the first step in this process, I advise, is the pre-qualification process. It sounds formal I know. But this is where the purchaser(s) go to their bank or a mortgage broker to determine the maximum amount of loan they qualify for. They can then add this to their down payment to determine the maximum budget they have to purchase a home.

When this step is skipped, a few things might go wrong:

  1. The person(s) may actually be able to afford less than what they think and when they fall in love with and offer on a property they find out they cannot afford, they will be heartbroken and perhaps give up buying for a long time.
  2. The person(s) might qualify for a higher amount of loan than they thought they might, and this will mean that they are not looking at properties, which are bigger and better.
  3. In the case of not having been pre-qualified for a mortgage, when a property is under competition with other buyers and a "NO SUBJECT" offer is preferred, it will be really risky to assume they will get the required financing without knowing beforehand.  

For these reasons, and others, I advise clients to seek professional mortgage help before starting the search process in order to be efficient and not get disappointed.