26 Nov Mortgage Financing for The Year Ahead
When we look back over this past year, we’ll certainly be able to say that 2020 was a memorable one, although for the many millions who suffered immeasurable losses, both personally and financially, it will be one they wish they could forget. That said, amongst all the negativity, pain and stress, the housing market in Canada has continued to grow; will it continue to do so as we move towards the end of the year and move into 2021?
Housing market predictions for 2021:
There are two main predictions set for the coming year as far as the housing market is concerned, and they’re low interest rates, and tighter restrictions on mortgage applications. Let’s look at them both in a little more detail:
Low interest rates:
The cost of borrowing money for a mortgage is at an all-time low, both on fixed and variable mortgage rates, and according to the Bank of Canada, they’re going to remain that way for the foreseeable future. As Canadian businesses have undoubtedly suffered alongside those in other countries, this is welcome news for those seeking to finance property. That said, mortgages won’t be as easy to access now, as they have been in previous years.
Intensified scrutiny on mortgage applications:
All mortgage applications are now being looked at far more closely than ever before, and while the guidelines for insurers or lenders may not alter significantly much, securing a mortgage will certainly become trickier. In many cases, individuals applying for a mortgage are being required to substantiate their applications with extra information and documentation, and even lenders are exercising a lot more caution over exactly who they lend their money to.
Securing a mortgage is going to be especially tough for those who are self-employed or who rely on overtime and bonuses to bolster their incomes, in fact, any kind of income that can be classified as non-guaranteed, will cause applications to be looked at in great detail.
In general, there will be a need to furnish mortgage applications with a lot of extra documentation, and if you’re looking to buy a home in the not too distant future, you’ll definitely want to seek help from a broker. A mortgage broker can not only help you find the best deal on a mortgage – no matter what your circumstances – but they’ll help you untangle the jargon and identify exactly what documents will be required in support of your application.
Final takeaway:
Planning ahead makes a lot sense right now, and while the housing market in Canada is buoyant, and rates are at an all-time low, you will need to be prepared for what lies ahead to avoid a lot of stress and potential heartache. If you have a mortgage in need of renewal or are seeking to refinance, talk to a broker now and give yourself plenty of time to get the necessary documents in order.