Key Mortgage Trends and Insights:

 

• The trend continues... New Construction properties purchased many years ago are appraising for values that are much lower than that of the purchase price
• This is an extremely tough situation, however, there are many different solutions and lenders available
• Lenders are lowering rates, but some are tightening credit policies and lending criteria. For example, one "Big 5" bank now lends less money to auto workers due to the tariff wars.  Having different options is more important than ever.
• Some lenders offer larger mortgages, auto-appraisals, HELOCs, easier portability, better pre-payment features.  There are many factors to consider...
• Banks and mortgage companies are offering favourable renewal terms - SOMETIMES. Banks and lenders often put each client into a statistical model, and then 50% of the time they offer a low rate, but 50% time they offer a terrible rate. 
• We always recommend a strategic discussion to ensure your rates, and short/long term goals are being considered.  Always remember the paradox of credit and HELOCs (ask me!)
• The best time to discuss renewals is 4-6 months before the renewal date... 
• The 3-year fixed rate is our most popular rate.  Interestingly, some liberal and also conservative clients are opting for the 4-year rate to "get past the Trump presidency," - and others are starting to express interest in variable rates
  
  

Should I sell first?  Or Buy first?

Historically, there was an easy answer.  You would always buy first, because it was difficult to buy, and you could also be assured that your existing property would easily sell, often in multiple offers.  Many borrowers do not realize that bridge financing can only be approved if the existing property is sold firm with no conditions.  And selling your existing property is no longer a guarantee...

The times have changed, and it is critical to consider this question.  

• Existing lender, mortgage size
• Financial strength (income, assets)
• Type of property you are buying / selling
• Do you have a place to stay if you sell?
• Source of down payment?
• Options and scenarios if the property doesn't sell
• In short, it depends!  A specific discussion is recommended to understand the risks and different available options.
  
  

Rate Update:

• We are seeing 3-year and 5-year fixed rates at 3.79% to 4.49% - which is creating interest for buyers
• Many clients are NOW considering variable rates, which are generally Prime - 0.5% to Prime - 0.8% (this translates to 4.95% - 0.8% = 4.15%)
  • These clients believe rates will plummet in the next 6-18 months
  • Historically, lenders were offering Prime - 0.4% so the 'discount' off of Prime is reasonably attractive
  • Some borrowers like this option with a plan to lock into lower rates in the future
  • Remember to consider that different Banks offer different variable rates (ARM vs VRM)
    
    

For a serious conversation and sound mortgage advice, contact Elan Weintraub who is co-founder and Mortgage Broker at MortgageOutlet.ca

His contact information:  elan@mortgageoutlet.ca  647-501-4663 or chat online at www.mortgageoutlet.ca