If you are in the market to buy a new home, you’ve likely been paying attention to the Bank of Canada interest rates. The latest announcement on July 12, 2023 saw it increase to 5%, a record high in the last 22 years. This move is part of an aggressive campaign to fight inflation and level out the economy. Following suit, lenders have also raised their rates.
This has likely left you with the question - “What does this mean for my home buying power?” As you approach a mortgage approval with these high rates and the new mortgage stress test, below are some considerations to keep in mind:
1. ENSURE YOU ALWAYS HAVE AN UP-TO-DATE PRE-APPROVAL
It is very important to keep your mortgage pre-approval up-to-date. Having an active pre-approval, not only will you be able to establish what you can afford, it will also allow you to lock a rate in for approximately 4 months with many lenders. Regardless of bank rate increases, you’ll get to keep your promised rate, as long as there are no changes to your application.
2. KNOW AND UNDERSTAND YOUR OPTIONS
If you’re working to improve your credit score, are an entrepreneur, or have a specialty property that you’d like to purchase – there are private mortgage lenders and credit unions that can finance unique situations and properties. Connect with them to learn about the options available to you under these circumstances.
3. THINK ABOUT ALTERNATIVE MORTGAGE PRODUCTS
Most commonly, many homebuyers choose a 5-year fixed-rate mortgage product for the payment security it offers. However, to maximize the amount you can qualify for, you may choose a shorter term mortgage, or a variable-rate mortgage which has a lower qualifying stress test rate. Remember, if you’re going with the variable option, if the interest rates rise, the interest portion you pay each month increases and unless your payment is static, your monthly mortgage payment will increase too.
As an experienced mortgage professional, I am happy to help you navigate this market with all of your mortgage needs. Let’s get you set with your pre-approval in hand, then I can connect you to some of the best real estate agents in the business! Reach out today and let’s get you set on the right path on your home buying endeavour!
☕️ Chad Eliason⠀⠀⠀⠀⠀⠀⠀
📞 250.804.9874⠀⠀⠀⠀⠀⠀⠀
📧 info@chadeliason.ca⠀⠀⠀⠀⠀⠀⠀⠀
🌐 http://www.chadeliason.ca
Σχόλια