Like many Canadians you’re probably wondering if now is the right time to buy? However, thanks to the corrective measures taken by the government, estate prices seem to have come down. The twin cities of Toronto and Vancouver have always been notorious for their high real estate prices. In response to the reforms being undertaken and despite rising mortgage rates, you might just be able to afford you home now.
As a rule, higher mortgage rates should bring housing prices down. But, for the time being, the soaring rates are only making buying a home a lot more expensive.
Homeowners May Need to Watch for Dropping Prices
If you’re looking to buy your home, keep in mind that the drop in real estate prices could offset the rising mortgage rates and make owning a house affordable. For instance, say, in the coming months, the mortgage prices rise by another 0.25 of a percentage point. However, if home prices fall by 5%, you might have to pay up to $60 less per month for the house you’re looking to buy.
Going with the earlier example, if the mortgage rates rise by 0.25 of a percentage point but housing costs less by 7.5%, you may end up paying $107 less in the future as compared to the rates today. And, if there’s a 10% fall in prices, you’ll end up saving $162 which is awesome.
Lock Your Mortgage Rate Now!
Dropping real estate costs is a positive situation and you should definitely take advantage of it. However, do try to create a balance with the rising mortgage so that the prices you pay for the house work in your favor.
To make that happen, you’ll need to watch out for the variabilities in the mortgage market. As a rule, mortgage brokers have always been able to offer you competitive mortgage rates as compared to the rates that your bank might offer you. That’s because, they work with a wide range of mortgage providers that may not just offer you affordable rates but also more attractive prepayment terms and other conditions.
However, the situation seems to be changing because of the rising mortgage rates. You might find that you must scout around with various brokers, banks, and other lending sources to find the ideal rates for you. Keep in mind that if you intend to pay a down payment of less than 20%, you might still have to work with a broker to get the loan you need.
Don’t Delay Taking Advantage of the Market
Most people make the mistake of delaying investment in any asset such as bullion, stocks, estate, or any other when prices are down. They prefer to delay investing expecting that the rates will go down even further. As a result, they typically end up entering the market when it reaches an uptrend. Given this factor, you might expect that real estate prices in Vancouver, Toronto, and other cities are likely to come down in the future.
If you’re thinking of investing in a home in any of these cities, chances are that you held back because of the high rates. But, if you’re thinking of living in the home and raising a family, any time is the right time as long as the prices are within your spending capacity. The problem arises when buyers purchase houses from an investment point of view. That makes the prices rise to a stage where homes become unaffordable.
Contact us today to discuss your options. It may be the right to buy after all!