A new calendar year is always a good time to recalibrate. When it comes to real estate and mortgages here are some of the resolutions that we’re suggesting in 2022, and if you want to know how much we believe in them, we’re even doing them ourselves!
Increase Your Mortgage Payments
If you have a mortgage, increasing your regular payments can help you to pay off your mortgage faster
I would say 50% of our clients are on a variable rate mortgage and, as you know, rates are slated to go up in 2022. The Bank of Canada will likely raise the overnight lending rate which will affect the mortgage prime rate. You may have a mortgage with a rate of less than 2% so now’s the time to use your pre-payment privilege and increase your payments. That extra money will go directly to the principal and it’s super easy to do. You can either call your existing mortgage lender or us and we can help you!
Get Into the Market
Raise your budget and lower your expectations if you’re buying a house for the first time in 2022.
Home prices will continue to increase for 2022 and beyond so it is reasonable to manage your expectations and do what you can to get into the market now. The driving force behind high price appreciation is that demand for homes is outpacing supply. More and more people want to buy a home and there are not as many homes for sale. Factors affecting demand include the large cohort of buyers between the ages of 25 to 40 years who account for almost 50 percent of the home buyers in the USA and a majority in Canada. Home supply has been affected by years of development restrictions and many individuals over the age of 65 are not ready to sell their homes yet.
The most difficult thing about buying a home in 2022 will be just getting into the market. You’ll likely need to raise your budget and lower your expectations. Maybe a condo apartment or a semi-detached house is a good place to start. Or consider a home that isn’t quite move-in ready and that needs some work. You’ll likely be able to sell it in three to five years for a profit and then move into something bigger at that time.
Use Your Home to Get Out of Debt
Debt doesn’t need to drag you down, especially if you own a house.
With the first lockdowns of covid, many people were forced out of employment whether due to job loss or loss of childcare. This meant many people were racking up debt during 2020 and not making much of a dent in paying it off in 2021. We’ve also have seen many people struggle with debt because their employment circumstances had changed during covid but now they’re back to working more regularly. If you have credit card debts or a line of credit debt, you’ll want to consider consolidating it into your mortgage. Why? It helps you lower your overall payments per month and increase your cash flow. It will also improve your credit history for future purchases or loans you want to obtain.
Remember, it doesn’t matter where you are, we can help you! We’re really great at collecting your information online through our secure web portal and we’ve been meeting all of our clients online. You’ll love the experience of working with us versus your current financial institution. It’s easy, it’s straight forward and you’re working with an experienced group of mortgage professionals that know how to get things done!