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Tag Archives: variableRateMortgage

Mortgage rates and real estate market stability

Mortgage rates and real estate market stability

Street of residential houses

 

Expect stability in 2019: mortgage rates and the real estate market. If you’re recovering from a good party on New Year’s Eve, here is something to sooth your real estate woes. But if you’re like me, I had trouble staying up past 10 pm and am ready for a new and profitable year!

With all the volatility in the last year around mortgage rates and the real estate market, we can expect stability in 2019.

IT’S A BALANCED MARKET SO IF YOU’RE A FIRST-TIME BUYER OR A REAL ESTATE INVESTOR NOW’S YOUR OPPORTUNITY.

In the last three years, sellers have had the upper-hand in the market. If you had a property to sell, and it was reasonably priced it would sell in no time. There are still hot spots in the market especially lower-priced homes or condos under $400K. That’s because of the demand from three key cohorts:  first-time buyers; real estate investors, and those down-sizing. The new mortgage rules have affected these cohorts the most. Many self-employed individuals are also having difficulty getting approved at a bank.

The 2018 real estate market ended with a whimper, but there are two converging trends that may give the housing market a boost in 2019. The unemployment rate is at historical lows and when people are working they are buying or able to refinance and pay their debts off. The Bank of Canada (BofC) is also slated to keep rates steady into 2019 because the prospect for inflation is low (have you seen the cost of gas lately?).

There’s also been a lot of attention placed on consumer debt loads. With the new mortgage rules borrowing has slowed and home appreciation is on a more sustainable increase. First-time buyers are also benefitting from their parents, as a massive transfer of wealth is happening both in terms of gifted down payments and co-signing on mortgages.

WHAT SHOULD I DO WITH MY MORTGAGE?

If you’re renewing your mortgage it may make sense to pay the penalty and renew early especially if you’re looking at consolidating debts. Your improvement in cash flow will offset the penalty so it’s worth considering. Five-year fixed rates are currently just under 4% and we can typically get at least a .5% lower on a variable rate mortgage (VRM). So does it make sense to do a variable rate mortgage? About 40% of our clients have a variable rate mortgage.  Even if rates go up this year by .5% you’re still further ahead especially if you can make a pre-payment on your mortgage while rates are low.  I currently have a variable rate mortgage so I track this carefully for myself and when I’m locking in I’ll let you know too.

IF YOU KNOW SOMEONE WHO’S BEEN TURNED DOWN BY THEIR BANK – TELL THEM TO CALL US. WHY? WE CAN PROBABLY GET THEM APPROVED.

As a mortgage broker, not only do we do mortgages for chartered banks like TD and Scotia, and credit unions like Meridian and Your Neighbourhood Credit Union, we also have access to lenders that will lend to borrowers even if they don’t meet the usual criteria. Have your friends or family come to us first, as it’s our goal to get the best mortgage that the borrower can qualify for.

WORK WITH EXPERIENCED PEOPLE

As with any industry, we’re seeing more and more people become mortgage agents because they think they can make a quick buck or some extra money. This in fact has hurt many borrowers because mortgage-financing is more complicated than ever before. We get calls on a regular basis from people who have tried getting financing and we promised one solution only to find out that it’s not available.

HAVE A HAPPY NEW YEAR! PLEASE CALL US IF YOU HAVE ANY MORTGAGE-RELATED QUESTIONS, WE LOVE TO HELP!

SANDRA LASTOVIC, PRINCIPAL BROKER

lastovic.s@mortgagecentre.com, 519-763-3900 ext. 1001


 

Bank of Canada influences on mortgage rates

Bank of Canada influences on mortgage rates

A few other things to consider: Bank of Canada big picture influences on mortgage rates 1. Although the unemployment rate is at historical lows, the number of people looking for jobs is lower and wage growth is running at 2.7 per cent annually, which is below the 3.0 percent that has been consistent when there’s no… Read More

What to do with your mortgage given the rate increase by the Bank of Canada

What to do with your mortgage given the rate increase by the Bank of Canada

What to do with your mortgage given the recent rate hike by the Bank of Canada? We were expecting the Bank of Canada (BofC) to increase its overnight lending rate which has affected most of the different banks’ prime rates. This rate increase occurred a few days ago and will have a direct impact on your… Read More

How To Budget For Variable-rate Mortgage Payments

How To Budget For Variable-rate Mortgage Payments

  How to budget for variable-rate mortgage payments: With a variable-interest-rate mortgage some lending institutions say that the same amount can be paid each month should a homeowner switch to a fixed-interest-rate mortgage. In the long term, less of the monthly payment goes toward paying down the principal. We can help a homeowner budget for a… Read More

Paying Your Variable-rate Mortgage Like a Fixed-rate Mortgage

Paying Your Variable-rate Mortgage Like a Fixed-rate Mortgage

  Paying Your Variable-rate Mortgage Like a Fixed-rate Mortgage. When and why you should pay off your variable-interest-rate mortgage: Very often the variable-interest-rate mortgage is less than a fixed-rate mortgage. If you pay off your variable-interest-rate mortgage, you will have saved more money than if you had a fixed-interest-rate mortgage. We can help a homeowner… Read More